Hurricane Katrina wiped out thousands of jobs last month, helping push the nation's unemployment rate up to 5. 1 percent, the Labor Department...
WASHINGTON — Hurricane Katrina wiped out thousands of jobs last month, helping push the nation’s unemployment rate up to 5.1 percent, the Labor Department said yesterday in its most detailed assessment yet of the storm’s economic impact.
The U.S. economy lost 35,000 payroll jobs in September — the first decline in more than two years, and a sharp contrast to the average monthly gain of 194,000 jobs in the 12 months that ended in August, the department said.
Despite the drop, the damage to national payrolls was less than many had feared. Economists were forecasting a loss of at least 150,000 jobs.
“This indicates that the job market is holding together pretty well,” said Mark Zandi, chief economist at Economy.com.
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By last week, 363,000 workers had filed new claims for unemployment-insurance benefits because of both Katrina, which struck Aug. 29, and Hurricane Rita, which hit Sept. 24, the department said Thursday, adding that it could not break down the separate effects of each storm.
In the report released yesterday, the net decline of 35,000 jobs left the national total little changed at 142.4 million payroll jobs — which excludes the self-employed and others who are not paid by employers. That means that whatever the exact number of jobs lost because of the storms and other factors, it was nearly offset by job gains resulting from recovery efforts and broader trends in the economy.
Meanwhile, job growth also was stronger in July and August than previously reported, the Labor Department said, adding a combined 77,000 jobs to its earlier totals.
The unemployment rate had fallen to 4.9 percent in August, the lowest level in four years. The rate rose to 5.1 percent in September in part because of job losses, but also because hundreds of thousands more Americans rejoined the labor force to look for work, the department’s data show.
The rate has averaged 5 percent since June, a level economists generally consider very good.
Overall, the Labor report “just shows how strong the underlying economy is,” according to Richard Yamarone, director of economic research at Argus Research.
The Federal Reserve will likely see the labor market’s health as another reason to keep raising its short-term interest rate in coming months to make sure inflation does not take off, analysts said.
Hurricane Rita hit after the Labor Department had conducted its September surveys, so it did not affect the September report.
Signs of Katrina’s effects appear evident in the loss of 80,000 jobs last month in the leisure and hospitality category, which includes hotels, motels, restaurants and casinos, said Ray Stone, an economist with Stone & McCarthy Research Associates. Employers in this sector had added an average of 31,000 jobs a month for the previous six months.
Similarly, retailing shed 88,000 jobs last month, after adding an average of 23,000 a month in the prior six months, Stone said.
Some jobs were cut for reasons unrelated to the storms. Manufacturing employment, for example, declined for a fourth straight month, in part because of a strike of Boeing aerospace workers, the Labor Department said.
Meanwhile, employers across the country continued hiring workers to provide professional and business services, and in education and health services. Some of that growth, however, also may reflect post-hurricane recovery efforts.
Construction workers were hired to fill 27,000 more jobs, reflecting rebuilding needs in the Gulf Coast states as well as the housing boom elsewhere.
Comments by Zandi of Economy.com provided by The Associated Press.