Hurricanes take their toll on US jobs market

WASHINGTON • The number of workers on United States payrolls declined last month for the first time since 2010, reflecting major disruptions from hurricanes Harvey and Irma, Labour Department figures showed yesterday.

Total non-farm employment fell by 33,000 positions on a net basis for the month, after an advance of 169,000 the previous month, and way below market expectations of a 90,000 gain.

Unemployment rate, derived from a separate Labour Department survey of households, dropped to 4.2 per cent from 4.4 per cent, the lowest since February 2001. About 1.47 million people were unable to work due to bad weather, most since January 1996.

Wage gains accelerated by 0.4 per cent month on month from the previous 0.2 per cent.

The hurricanes had a "net effect" of reducing nonfarm payrolls last month, while there was "no discernible effect" on the national unemployment rate, the department said in a special note. Data-collection rates "generally were within normal ranges" for both surveys that produce the figures.

Restaurants and bars - an industry where most workers get paid only if they show up to work - had a 105,000 drop in payrolls, according to a statement from Bureau of Labour Statistics acting commissioner William Wiatrowski.

Recent reports like the Institute for Supply Management surveys for employment in manufacturing and service industries indicated that the underlying labour market is humming along.

The pickup in wages was encouraging, though some economists had already penciled in a lift - with reasons including storm effects that prevented low-paid Americans from working, and a calendar quirk that tends to produce stronger wage growth when the 15th of the month falls within the survey week.

With the US near full employment, Federal Reserve policy makers have been watching for signs of an acceleration in paychecks that may push inflation closer to their goal. The central bank last month forecast it will raise interest rates once more by year-end, with investors and analysts expecting the move in December.

"There are ample reasons to believe that the underlying labour market picture remains solid," suggesting that a weak reading on payrolls "should be appropriately discounted," economists Matthew Luzzetti and Brett Ryan at Deutsche Bank Securities said in a note before the report.

Private employment fell by 40,000 after increasing 164,000 the previous month, while government payrolls rose by 7,000.


A version of this article appeared in the print edition of The Straits Times on October 07, 2017, with the headline 'Hurricanes take their toll on US jobs market'. Print Edition | Subscribe