Jobs are declining for the first time since 2010, the year jobs climbed out of the 2008 recession. Yet, the unemployment rate is the lowest in sixteen years with 4.2%. Why the drastic decline? Blame Hurricanes Harvey, Irma, and Maria. Why is national unemployment improving? There were more jobs created than lost. The simple explanation doesn’t explain the whole story, however.
In detail, experts expected a decline due to the hurricanes, but the declines placed a larger dent on the job market than expected. The industry affected most by the hurricanes was food, leisure, and hospitality (105,000 jobs). Other sectors like information, labor, and retail had job loss, but there was not a large rift in the economy because of it.
Fortunately, the hurricane dent is temporary. Rebuilding Houston, Florida, and Puerto Rico will aid in job growth beginning this month, through the remainder of the year, and into 2018. As for the hospitality industry, losing this many jobs won’t hurt them long-term, according to Mark Hamrick, a senior analyst for Bankrate.com.
The bright side of a bad situation revolves around job growth prior to, during, and after the hurricanes. September alone created 906,000 jobs. Between April and June, the economy grew at an extremely fast rate of 3.1%. In between June and September, job growth grew at a slower pace, yet never declined.
Nonetheless, the downside of job growth stems from the survey of working Americans. While those people are working, the answers came from hourly wage employees and the self-employed. The inflated job growth is misleading, yet positive. The stark contrast between jobs lost and gained baffles Justin Wolfers, a U of Michigan economist. To him, a divide this large was nonexistent prior to this incident.
This report shouldn’t startle job seekers, business entrepreneurs, and everyone in between. It’s rare that three hurricanes arriving one after another would invade our shores and cause significant damage each time. Experts expect the economy to operate normally soon, and as the months pass, the hurricanes’ impact will fade. In closing, hurricanes are temporary, but job growth is forever (as we expect it to be).