The much awaiting monthly payroll figures from the US showed that the economy was hit by the two hurricanes in September. However, the underlying data although a bit distorted suggests long-term pressures building up.
Summary:
- Payrolls decline 33,000 in September, missing estimates of 82k increase
- August payrolls revised higher to 169k
- Unemployment rate falls to 4.2% marking the lowest levels since Feb’2001
- Wages for August and September increase, standing at 2.9% on a year over year basis
- Fed officials likely to view the data with skepticism
US economy loses 33k jobs in September
According to data released by the Bureau of Labor Statistics (BLS), the US economy lost 33k jobs during the month of September. This was below forecasts as the economists polled expected a headline payrolls print of 82k jobs. The payrolls for August were revised higher to 169k jobs, up from the initially reported 156k during the month.
U.S. Nonfarm payrolls: -33k (Sep 2017). Source: Tradingeconomics.com
The declines in the jobs were attributed to the summer hurricanes which were seen affecting the labor markets as a result. The region of Texas and Florida were the most affected on account of the hurricanes Harvey and Irma. The hurricanes came just before the monthly payrolls report was submitted.
Data showed that among the various sectors, the food services and restaurant sector took the largest hit. Employment in the sector was seen falling 105k during the month contributing to the overall decline in jobs. However, a survey among households showed a different picture with the employment seen rising 906k in September.
The BLS said that the net effect of the hurricanes was to reduce the estimates for the payrolls for the month. However, subsequent revisions cannot be ruled out.
US unemployment rate falls to 4.2%
The unemployment rate in the United States fell to 4.2% in September. This beat estimates which forecast a 4.4% unchanged print from the previous month. This marked the lowest unemployment rate seen since February 2001.
Despite the upbeat numbers, the markets were seen muted to the unemployment rate.
Wage growth rises strongly
The wage growth was another important component which saw some positive data. According to the report, wages in the U.S. rose by $0.12 to $26.55. On a year over year basis, this was a 2.9% increase in wages.
Read more: https://www.orbex.com/blog/2017/10/september-2017-payrolls-report-distorted