The number of workers on U.S. payrolls declined last month for the first time since 2010, reflecting major disruptions from hurricanes Harvey and Irma, Labor Department figures showed Friday. The jobless rate fell to a new 16-year-low while wage gains accelerated.
Highlights of Employment (September)
- Payrolls fell 33k (est. up 80k) after 169k advance; revisions subtracted combined 38k in July-Aug.
- The unemployment rate, derived from a separate Labor Department survey of households, dropped to 4.2% (est. 4.4%) from 4.4%; lowest since Feb. 2001.
- Average hourly earnings rose by 0.5% m/m (est. up 0.3%) after 0.2% rise; up 2.9% y/y (est. 2.6%); July-Aug. figures revised upward.
- About 1.47 million people were unable to work due to bad weather, the most since January 1996.
Key Takeaways
The hurricanes had a "net effect" of reducing nonfarm payrolls in September, while there was "no discernible effect" on the national unemployment rate, the Labor Department said in a special note Friday. Data-collection rates "generally were within normal ranges" for both surveys that produce the figures.
Restaurants and bars — an industry where most workers only get paid if they show up to work — had a 105,000 drop in payrolls, according to a statement from Bureau of Labor Statistics acting commissioner William Wiatrowski.
The numbers reflect Harvey's impact on Texas in late August, and Irma's fallout in Florida in September. Data on the labor market and the rest of the economy may be volatile for several months as the weather effects wash out and rebuilding picks up. Puerto Rico, which was hit by Hurricane Maria last month, isn't included in payrolls.
It's hard to measure the exact impact of severe weather on national employment data; state-level figures due Oct. 20 will provide a more detailed look. Federally-designated disaster counties in Florida and Texas accounted for 7.7% of U.S. employment in March, according to the Labor Department.
The number of Americans who didn't report to work because of bad weather comes from the Labor Department's survey of households, which reflects the calendar week that includes the 12th of the month. The survey still counts a worker as employed even if they missed that entire week's work for weather-related reasons, regardless of whether they were paid or not for the time off.
The agency's survey of establishments, which produces the payrolls figure, counts as employed a person who worked at least one hour in the pay period that includes the 12th of the month. Bad weather hurts the payrolls tally if employees got no compensation for that entire pay period.
Other data and recent reports — such as Institute for Supply Management surveys for employment in manufacturing and service industries — indicate the underlying labor market is humming along.
