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Harvey and Irma saw the U.S. lose more jobs in September than expected. The U.S. jobs report lost 33,000 non-farm jobs, much less than the 80,000 job gains expected the Bureau of Labor Statistics said on Friday. Estimates had ranged from - 45,000 to over +150,000 jobs.

hurricane harvey floodedThe unemployment rate is back at a 16-year low of 4.2%. September's forecasts were fraught with uncertainty with the widespread flooding and power outages caused by Hurricanes Harvey and Irma. The hurricanes affected over 10% of the population and caused more than $100bn in damages.

The storm partially offsets continued job growth in the rest of the country and also weighed on the household survey. A concern for the Fed has been wage growth, there is some relief as it ticks higher from August. Average hourly earnings rose by 0.5% month-on-month, and 2.9% year-on-year. Economic theory is out the window as wages are barely rising with the unemployment rate is at a post-crisis low. This brings into question what is the real unemployment rate and the true inflation, cost of living rates.

It isn't that simple though as the Fed's largely experimental policy keeps surprising them. There has not been the wage growth anticipated based on historical models and the leaned on economic relationships. With the social payments and huge black market in the U.S. there has not been a recovery in the labor participation rate either. Hence we get soft productivity and inflation dynamics in a politically challenged nation.

Bureau of Labor Statistics September Employment Report
Release Time: Friday 6 October 2017 - 8:30 ET


  • July non-farm payrolls -33k vs +80K  expected, 156K (revised to 169k)
  • Two-month net revision +2K
  • Private payrolls -40k vs +75K exp
  • Manufacturing payrolls vs + exp
  • Unemployment rate 4.2% vs 4.4% exp
  • Participation rate 63.1% vs 62.9% prior
  • Underemployment rate 8.6% vs 8.6% prior


  • Average hourly earnings +0.5% vs +0.3% m/m expected, Prior +0.2% m/m
  • Average hourly earnings +2.9% vs +2.6% y/y, Prior +2.7% y/y
  • Average weekly hours 34.4 vs 34.4 expected


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