Friday’s unemployment report for September should provide the most comprehensive glimpse to date of the impact of Hurricanes Harvey and Irma on unemployment in Texas and Florida.
Harvey struck the Texas coast in late August, and Irma hit Florida’s west coast in early September. John Boyd Jr., principal of New Jersey-based The Boyd Co. Inc., spoke of a delayed reaction when jobless claims in Texas shortly after Harvey made landfall showed an initial surge followed by a modest decline.
Patricia Laya and Agnel Philip of Bloomberg wrote that “any weakness (revealed in Friday's report) is likely to be short-lived.”
The numbers may support that.
“The fundamentals of the economy are improving,” Boyd said, “and I expect a rebound in jobs numbers in the months ahead led by manufacturing growth. I see recent gains in the auto sector – General Motors (GM, Financial) up 3.1% and Ford (F, Financial) is up 2.3% – as especially encouraging indicators that investors are buying into the idea that the economy is strengthening.”
Laya and Philip observed that “both storms displaced tens of thousands and disrupted businesses in areas with 11 million workers.”
That, wrote Christopher Rugaber, economics writer for The Associated Press, means “a blurrier-than-usual snapshot of the economy” when the report is released Friday.
“Thousands of businesses had to shut their doors and left many people temporarily out of work,” Rugaber wrote, but he agreed that “the decline in employment should be short-lived. A hiring rebound is expected for October or November.”
Nationally, total nonfarm payroll employment went up by 156,000 in August, and the unemployment rate was practically unchanged at 4.4%. Economists surveyed by Reuters have predicted that Friday’s report will show the unemployment rate remained at 4.4% in September.
Automatic Data Processing (ADP, Financial) reported that private employers added 135,000 jobs in September, the smallest increase in nearly a year.
Nationally, first-time jobless claims fell by 12,000 last week. Declines were even more pronounced in the states most affected by the hurricanes – Texas (15.1%), Florida (20.4%) and Georgia (26.8%). Those states witnessed sharp increases after the hurricanes made landfall.
“I see the administration's focus on tax reform and infrastructure spending, which seems to enjoy at least some degree of bipartisan support, further boosting confidence among businesses and job creators in the economy,” Boyd said. “It is impossible to overstate how significant lowering the corporate income tax rate will be “on spurring reshoring activity – already on the rise due to increasing operating costs offshore, a newly strengthened ‘America First’ preference in the nation's $1.7 trillion federal procurement market – as well as other supply chain and qualitative concerns making doing business offshore less desirable and more expensive.”
On the eve of the September unemployment report, stock markets once again hit new all-time highs, prompting President Donald Trump to issue a tweet about it.
“Stock Market hits an ALL-TIME high!” Trump tweeted. “Unemployment lowest in 16 years. Business and manufacturing enthusiasm at highest level in decades.”
The Dow closed at 22,775.39 (up 113.75 points) Thursday. The Nasdaq was up 50.73 points at 6,585.36, and the Standard and Poor’s 500 was up 14.33 points at 2,552.07.
Disclosure: I do not own any of the stocks mentioned in this article.
