Figure lower than expected but unemployment ticks down to 4.1%. Economy shed 30,000 jobs in September as twin hurricanes held back hiring
The US economy bounced back in October from a dramatic slump in hiring in the wake of two devastating hurricanes, the labor department announced on Friday.
The US added 261,000 new jobs and the unemployment rate ticked down to 4.1%.
In September the US shed 30,000 jobs – the first loss in seven years – as hurricanes Harvey and Irma held back hiring in Texas and Florida. The leisure and hospitality industry was hardest hit by the hurricanes in September, shedding 111,000 jobs.
Employment in food services and drinking places rose sharply in October – up 89,000 – following a decrease of 98,000 in September.
October’s figure was still lower than analysts had expected, perhaps reflecting the continued impact of the storms. September was the second month of disappointing growth in the US jobs market. The labor department had calculated that the US had added 169,000 new positions in August, below the 180,000 that had been expected by economists.
But the figures from August and September have now been revised up, to 208,000 and 18,000 respectively. And at 4.1% the unemployment rate is now at lows unseen since December 2000.
“JOBS, JOBS, JOBS!” president Donald Trump tweeted shortly after the figures were released.
Paul Ashworth, chief US economist at Capital Economics, said that while October’s figure was not as robust as had been expected, the revisions to the two previous months may have accounted for the lower number. “Nevertheless, that still means employment increased by a relatively modest 140,000 per month over the past two months, which is a significant slowdown on the pace of employment growth in the first half of this year,” he said.
Wage growth, which has been slow since the recession, stalled in October. Average hourly earnings fell by one cent in October to $26.53 an hour. Economists had expected a slight monthly gain.
The release of October’s figures comes a day after Trump announced a new tax plan that he has pledged will create more jobs in the US. The plan, which will deliver big cuts for business and the wealthy, as well as more modest cuts for the middle class, will provide “the rocket fuel our economy needs to soar higher than ever before”, Trump said.
On Wednesday, ADP, the private payroll supplier, said the private sector added 235,000 positions in October.
Mark Zandi, chief economist of Moody’s Analytics, which helps compile the report, said: “The job market rebounded strongly from the hit it took from Hurricanes Harvey and Irma. Resurgence in construction jobs shows the rebuilding is already in full swing. Looking through the hurricane-created volatility, job growth is robust.”
The solid rise in jobs is likely to confirm plans by the Federal Reserve to raise interest rates at its next meeting in December. On Thursday, Trump appointed Fed board member Jerome Powell as the next chair of the central bank. He will replace Janet Yellen when her term ends in February.
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