U.S. economy sheds jobs for first time since 2010 as hurricanes hit


U.S. economy sheds jobs for first time since 2010 as hurricanes hit

The damage from Hurricanes Harvey and Irma produced the first monthly decline in U.S.jobs in seven years, with a reported loss of 33,000 in September.

USA non-farm payrolls declined 33,000 for September compared with expectations of a gain around 85,000 for the month and this was the first reported decline for over seven years.

Economists had expected the addition of 80,000 jobs last month, but that was before the effects of Harvey and Irma were known.

The US has been experiencing one of the longest stretches of job creation in its history, with the economy adding a monthly average of more than 170,000 over the past year.

The food services industry lost 105,000 jobs, largely through layoffs associated with the hurricanes.

The dollar gained ground as the earnings component dominated with EUR/USD at fresh 5-week lows below 1.1680 while USD/JPY broke above the 113.20 level.

Average hourly earnings increased by 12 cents to $26.55, after a 4-cent increase in August. That was the biggest increase since 2007.

In spite of the weak-looking payrolls number, the unemployment rate fell to 4.2% in September, from 4.4% in August. It's probably a temporary blip. They could have been skewed, however, by the fact that many low-wage employees stayed away from work after the hurricanes.

"My guess is that was skewed", Faucher said.

So wage growth could slow down in the coming months once the impact of Hurricanes Harvey and Irma start to fade and people in Texas and Florida get back to work.

Interestingly, while this dynamic temporarily whacks jobs, it artificially boosts wage growth. "We're going to make up for it late 2017 and early 2018".

U.S. employment fell in September for the first time since 2010 as hurricanes Harvey and Irma took their toll on the jobs market.

Others feel that the effects may be short-lived, as businesses reopen in Texas and Florida.

The Federal Emergency Management Agency declared 87 counties as disaster areas in the two states. Another positive was that the labor force participation rate rose to 63.1% in September from 62.9% in August.

Puerto Rico, which was devastated by Hurricane Maria, is not included in the BLS report.

If a worker doesn't receive any pay for the survey pay period, which is in the middle of the month, the Labor Department considers that person unemployed. This number has been tracked by economists for signs of the labor market drawing in workers who were left behind after the financial crisis.



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