The first of the hurricane affected data was released last week with September data. The employment report was all over the map. Non-farm payrolls were reported as having declined by 33,000 for the month. The unemployment rate dropped to a cycle low of 4.2%, and average hourly earnings jumped by 0.5%. The problem is in the data collected to estimate these results. The unemployment rate uses telephone household surveys. The survey was conducted during the week of Hurricane Irma and after Harvey. The data is difficult to use since many calls in the survey were not taken and therefore, the estimates used by the Labor Department were larger than normal. The nonfarm payroll number is a survey of companies and their labor force. Far fewer of the monthly survey forms were returned in September due to closings from the hurricanes and the Labor Department imputed these results based on the results of the forms that were returned.

The decline in nonfarm payrolls was at odds with the huge growth in people with jobs in the unemployment rate. The loss of jobs in the nonfarm payroll number was primarily due to a decline of 111,000 jobs in leisure and hospitality sectors which were most affected by the hurricanes in states where tourism is such a major industry. The BLS said they did not believe the hurricanes had a major impact on the unemployment rate, but we believe it did…

ProBank Austin Advisor – October 9, 2017