Hurricanes Harvey and Irma did quite a number on Florida and Texas in the past two months. They killed more than 150 people and inflicted more than $165 billion worth of damage along coastal cities. Now a clearer picture is emerging of how the storms have hurt the US economy.
In September, the economy lost thousands of jobs — 33,000 of them— for the first time in seven years. It’s a remarkable dip after months and years of steady job creation. In August, for example, the economy added 237,000 jobs. These numbers are seasonally adjusted, so they already factor in normal hiring patterns that change from summer to fall months. (That includes things like a summer resort that lets workers go in the fall.) Severe weather is not factored in that way.
Economists seem to agree that the hurricanes are largely to blame for last month’s job losses. That’s because most happened in industries that are super sensitive to severe weather: retail, leisure, and hospitality. Labor Department statistics released Friday show an 8 percent drop in leisure and hospitality jobs in September compared to August:
Restaurants and hotels are highly dependent on customers visiting their establishments. If customers all over the city are trapped in flooded homes or can’t drive, then businesses start losing a ton of money. On top of that, many hotels and restaurants in Florida and Texas were damaged too, and may have shut down temporarily. This all makes it highly unlikely that they would expand hiring during that time.
It’s too early to know whether most of these jobs were lost in Florida and Texas, says Jed Kolko, chief economist for the job search engine Indeed. But he points out another sign that the hurricanes are hurting the job market: a huge spike in the percentage of workers who said they worked less or not at all because of the weather. Nearly 3 percent of workers said that was the case in September. That doesn’t sound like a lot, but look how that compares to past months:
Economists don’t seem too alarmed about the sudden dip in job creation. They expect that hiring at restaurants and hotels will start to pick up again in October as Texas and Florida recover from the storms.
In other industries, employers are still creating new jobs.
Jonathan Wright, an economist at Brookings, ran an analysis of the jobs numbers to try and pinpoint how many job losses were directly linked to the weather. He concluded that about 100,000 jobs were lost in the United States because of the storms. If you don’t factor in these weather-related losses, then the economy would have added about 67,000 jobs in September, he calculates.
That’s still a pretty low number compared to the 237,000 new jobs created in August, but it doesn’t seem like the hurricanes have done permanent damage to the job market. After all, the unemployment rate fell a bit in September — from 4.4 percent to 4.2 percent. That’s the lowest it’s been since 2001.