The US economy in September lost more jobs than it created for the first time in seven years due to the damage caused by Hurricanes Harvey and Irma.
Nonfarm payrolls fell by 33,000, the Labour Department said in its monthly report.
Most of the losses occurred in the leisure and hospitality sector, where most employees can’t work remotely and only get paid if they show up. It shed 111,000 jobs, the most dating back to at least 1945. Employees who weren’t paid during the Labour Department’s survey week (of September 12th) were not counted as employed.
“In short, this single-month drop in payrolls should be temporary, doesn’t appear to be indicative of a broader economic slowdown, and will likely reverse next month,” said Jim Baird, the chief investment officer for Plante Moran Financial Advisors.
Puerto Rico, which was devastated by Hurricane Maria, is not included in the BLS’s report.
Economists had expected the hurricanes to slow hiring, but had a more bullish median forecast of 80,000 jobs.
There were three bright spots in September’s report, however: the unemployment rate fell to a new postrecession low, labour-force participation increased, and wages jumped.
The unemployment rate dropped to 4.2%, the lowest since February 2001. The BLS said the hurricanes had “no discernible effect” on this rate.
Average hourly earnings jumped by 0.5% month-on-month and 2.9% year-on-year, both accelerating from August. However, they could have been skewed by the fact that many low-wage employees stayed away from work after the hurricanes.
The labour-force participation rate rose to 63.1% from 62.9%.