Hurricanes: US Lost 33,000 Jobs in September

• Hurricanes: US Lost 33,000 Jobs in September

Hurricanes plunged U.S. jobs to the lowest since 2010 in September.

U.S. Non-Farm Payrolls declined by 33,000 in September, according to the Labor Department report released on Friday. This is lower than the 80,000 increase expected by economists and revised 169,000, initially reported as 156,000, recorded in August.

However, the unemployment rate improved to a 16-year low of 4.2 percent in the month and the participation rate rose to 63.1 percent. Suggesting that regions not affected by the hurricanes were creating jobs in the month.

“The lousy returns from the September jobs report will make little impression on observers, who essentially gave the labor market a free pass due to the impact of Hurricanes Harvey and Irma,” said Curt Long, chief economist at the National Association of Federally Insured Credit Unions.

The closely watched earnings climbed 0.5 percent in September, up from 0.2 percent increase recorded in August. On a yearly basis, earnings rose by 2.9 percent. This is closer to the 3 percent regard by the Fed as normal and it is expected to bolster consumer spending and pressure prices going forward.

While the hurricanes disrupted job creation in September, the effect should be temporary as job numbers remained within range, according to the Labor Department.

“I don’t think this is indicative of problems in the labor market — it’s because of the hurricanes,” said Gus Faucher, chief economist at PNC Financial Services Group Inc. in Pittsburgh. Excluding effects of the storms, “the economy is in decent shape, the labor market continues to improve, and we’ll bounce back to job growth in the final three months of 2017.”

Therefore, the surge in earnings is predicted to boost consumer spending and further pressure prices in the final quarter of 2017. Meaning the probability of the Fed commencing balance sheet normalization and raising rates in the fourth quarter is high.

Goldman Sachs raised its December rate hike odds to 80 percent, up from 75 percent before the job data.  Citing growing economy and healthy labor market.

The US dollar dipped against some of the group 10 currencies but should improve as more investors peruse the Friday report.