Hurricanes Irma and Harvey Spur the First Employment Decline in 7 Years

The U.S. labor market lost 33,000 jobs in September.

People sit in a mostly empty Florida bar in the wake of Hurricane Irma, which led to job loss in the food and beverage industry.  (Carlo Allegri / Reuters)

On Friday, the Bureau of Labor Statistics reported that the U.S. labor market shed 33,000 jobs in September—the first decline in the total number of paid positions in the economy in seven years. The unemployment rate, however, fell to 4.2 percent from 4.4 percent. (The unemployment rate doesn't directly measure job loss, rather reflects the number of Americans who say that they are unemployed and actively seeking work.)

Economists had expected a small uptick in the jobs figure—around 80,000 added for the month. But instead the number fell, although only trivially, likely due to Hurricanes Harvey and Irma, which ravaged the Southeast and resulted in declining economic activity at restaurants, bars, and in the construction industry. Economists believe that the economy should recover from these acute crises. The BLS's data do not cover Puerto Rico or the U.S. Virgin Islands, where damage has been even more significant.

Despite September’s losses, the labor market is still performing reasonably well, adding an average of 148,000 jobs per month since January. Even as the economy suffered losses due to hurricanes, other areas, including healthcare and transportation, experienced significant growth in September.

But there are still causes for concern: Labor force participation is stalled at 63.1 percent, and wage growth continues to be middling. In September, wages reached $26.55—a 0.45 percent increase from August and a 2.9 percent jump from this time last year. But that improvement could also be storm related, since many of the workers who lost jobs during the month were likely low-wage employees, leaving the remaining wages a pinch higher.