Harvey and Irma Join Forces to Break 83 Month Job Creation Streak


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Research Brief
October 2017
Developing Trends
The U.S. economy lost 33,000 jobs in September on the heels of two hurricanes making landfall. The phenomena will likely be short lived as following both Hurricane Andrew and Hurricane Katrina the U.S. economy added an average of 130,000 Positions after dropping significantly the immediate months after each storm. These gains occurred even though the U.S. economy was significantly weaker during each of those times.
Average earnings growth continues to rise, but at a nominal pace of 2.9 percent. During growth cycles, its not uncommon for wage growth to reach above 3.5 percent. The current slow but steady economic engine has averaged just 2.3 percent over the last five years.
Total U.S. job openings stands at 6 million, 15 percent higher than the 2001 peak. This is the highest level on record.
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Harvey and Irma Join Forces to Break
83 Month Job Creation Streak
Major hurricanes typically cause an employment setback. When Hurricane Andrew hit Florida in August 1992, the national job creation slowed the following month and Katrina cost the economy a 66 percent drop in job creation before rebounding the following November. This year, having two major hurricanes strike the U.S. within weeks of each other created a setback, particularly for leisure and hospitality jobs. As Houston and Florida rebuild, construction jobs will be added and displaced positions will be recovered, creating a modestly positive employment outlook for the months ahead.

The unemployment rate fell to 4.2 percent, but this also likely reflects a hurricane induced anomaly. Still, this very low figure implies that there are just 6.8 million people looking for work in the U.S.. As of last count,

there were 6 million jobs available. As the job seeker job availability ratio approaches 1:1, it simply reiterates the labor shortages and skills gap the U.S. labor force faces. However, despite the tight labor market, wage growth has yet to accelerate in a meaningful way. This reflects the nominal movement in wages among the unskilled labor segments. Professional and business services annual wage growth is 3.3 percent this September, 40 basis points higher than the overall wage growth average. Wages for these jobs have generated more substantive growth as the availability of this skilled workforce continues to minimize. The unemployment rate for those with a college education dropped 20 basis points year over year to a very tight 2.3 percent this September, with 1.3 million higher-educated workers seeking employment.
33,000 Job Loss September 2017 4.2% Unemployment Rate in September 2017
* Through July
Sources: Marcus & Millichap Research Services; BLS
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