October brought strong job growth of about 250,000 new positions to the U.S. economy, analysts predicted ahead of Friday’s employment report, as the country rebounded from hurricanes Harvey and Irma.
The jobless rate was projected to hold steady at 4.2 percent, the lowest level in 16 years, while the year-over-year gain in wage growth was expected to drop slightly to 2.8 percent.
Cathy Barrera, chief economist at the jobs website ZipRecruiter, said economists widely guessed October’s numbers would reflect economic recovery as employees in Texas, Florida and other states hit by the storms returned to work.
The economy lost jobs for the first time since 2010 in September, largely because of the hurricanes, which put parts of Florida and Texas under evacuation orders. The wind and rain closed offices, destroyed homes, totaled cars and flooded roads.
Roughly 100,000 hospitality employees missed paychecks in September, economists estimated. But that was mainly because they could not get to work.
“Quite a bit of the loss we saw last month was not actually people who permanently lost their jobs, but rather people who did not happen to be paid during that period,” Barrera said. “We’ll see those people come back, plus some real job gains.”
Puerto Rico statistics do not appear in the monthly report, released by the Labor Department’s Bureau of Labor Statistics.
Several analysts had expected a return to the more typical pace of job growth in October, with about 150,000 new positions, on top of a return to work for the 100,000 affected by Harvey and Irma.
They also predicted higher-than-normal gains in retail, which started ramping up hiring last month for the holiday season.
But spiking demand is likely also clashing with the realities of a tight labor market. Though the need for construction workers has surged in Florida and Texas, employers there have complained about a lack of skilled workers to fill vacant roles.
“There aren’t enough workers to do those jobs,” Barrera said. “You don’t see those extra jobs being created.”
Robert Frick, a corporate economist at the Navy Federal Credit Union, said it’s harder to collect data during the chaos of a natural disaster.
“In September, the consensus was 80,000 jobs were added, when it turned out to be minus 33,000,” he said. “Nobody has any idea what is going to happen.”
But he said the fundamentals of the job market remained strong.
“Manufacturing is strong,” Frick said. ‘Exporting is picking up. Consumer spending has been maintaining a good level” — all signs the economy is in good shape.
Mark Hamrick, a senior economic analyst at Bankrate, a consumer financial services company in New York, agreed the country appears to be “humming right along,” but cautioned that the economic expansion continues to be uneven.
Some stretches of the Rust Belt are still reeling from the last two decades’ decline in manufacturing work, he said, and many workers in the heartland continue to lack the “soft skills” required to land a good-paying position. Some were also caught in the opioid epidemic.
“Larger cities on either coast are the magnets for employment,” Hamrick said, “and a lot of places in between are continuing to suffer.”
Report courtesy Washington Post
Frontpage December 29, 2020