WASHINGTON (AP) — The September jobs report the government will release Friday morning will probably show a sharp drop in hiring compared with August because of Hurricanes Harvey and Irma.
The two storms inflicted heavy damage in Texas, Florida and other parts of the Southeast. Thousands of businesses had to shut their doors, leaving many people temporarily out of work.
Economists have forecast that employers added just 80,000 jobs last month, barely half the 156,000 they added in August, according to data provider FactSet. That would be the lowest job gain since March.
But the storms will likely be the reason for the decline. Economists at JPMorgan Chase estimated the hurricanes will have lowered last month’s gain by 75,000, meaning that without them, a solid 150,000 or so jobs would have been added.
A hiring rebound is expected for October or November as many businesses reopen and construction companies in the affected areas ramp up repair and renovation work.
If September’s hiring does drop temporarily, and October’s or November’s rebounds, economists and the Federal Reserve may find it hard to assess the state of the economy with any precision over the next couple of months. Even so, most Fed watchers expect the central bank to raise its benchmark interest rate when it meets in December.
The Labor Department says about 11.2 million people had been employed in the 87 counties in Texas and Florida that were declared disaster areas. That’s equal to about 7.7 percent of the nation’s workforce. Hourly employees in the area who couldn’t work and missed a paycheck would be counted as not working, thereby lowering the September job gain. That’s true even if those employees return to work after the storm passes.
Excluding the hurricanes’ effect on the monthly hiring data, several indicators suggest that the economy and the job market remain on firm footing.
On Wednesday, a survey of services firms — covering restaurants, construction companies, retail stores, banks and others — found that they expanded in September at their fastest monthly pace since 2005. That followed a survey of manufacturers, which found an equally strong gain. Factory activity expanded at the fastest pace in more than 13 years.
There are signs that a rebound from the hurricanes is already boosting the economy. Auto sales, which had been lackluster this year, jumped 6.1 percent to more than 1.5 million in September from a year ago, according to Autodata Corp., as Americans began to replace cars destroyed by the storms. That increase in purchases should soon lead automakers to step up production.
Harvey caused about $76 billion to $87 billion in economic losses, according to Moody’s Analytics, an economic consulting firm. The estimate includes damage to homes and businesses as well as lost business and economic output. That calculation would make Harvey the second-worst U.S. natural disaster, after Hurricane Katrina in 2005.
Irma will likely end up having caused $58 billion to $83 billion in economic losses, Moody’s forecasts. Maria, which hammered Puerto Rico and the U.S. Virgin Islands, could cost $45 billion to $95 billion, though that is a preliminary estimate.