Despite Katrina's wrath, the US economy is still chugging along nicely. Only 35,000 net jobs were lost in September, much fewer than the economists expected. With upward revisions to payroll figures for July and August (+35,000 to 277,000 and +42,000 to 211,000, respectively), this means that 42,000 new jobs were announced in September.
A string of robust jobs growth and I expect that pay raises will be on tap.
Here's FT's article on the subject.
A string of robust jobs growth and I expect that pay raises will be on tap.
Here's FT's article on the subject.
US economy lost 35,000 jobs in September
By Christopher Swann in Washington
Published: October 7 2005 13:44 | Last updated: October 7 2005 14:13
Employment in the US fell by just 35,000 in September, despite large scale job losses caused by Hurricane Katrina.
Economists had been forecasting a much larger fall of about 125,000. The figures suggest that the employment market is considerably more robust than previously thought.
There were also sharp upward revisions to job creation in previous months. Employment growth in August was revised up from 169,000 to 211,000 and in July from 242,000 to 277,000.
The employment rate, which is calculated separately, rose from 4.9 per cent to 5.1 per cent.
The Bureau of Labor Statistics estimated that Katrina had detracted just 230,000 from payrolls. Without this, payrolls grew at close to the trend rate.
Over the past 12 months employment has grown at an average rate of 194,000 a month.
The impact of the hurricane was focused in the retail and hospitality sectors.
”This means that the Fed can afford to focus on the inflationary implications of Katrina, confirming their belief that the impact on growth is likely to be modest,” said Alan Ruskin, director of research at 4Cast, the consultancy. “The underlying job creation rate is pretty healthy.”
The rise in hourly wages remained a concern however, rising by 0.2 per cent or 2.6 per cent over the year in September. This continues to lag inflation. The consumer price index has risen by 3.6 per cent in the year to August and some economists expect the headline rate to rise to 4.4 per cent in September.
US Treasury bonds fell on job numbers, with yields rising across all maturities as the market focused on inflationary risks and the increased likelihood of further rate hikes by the Federal Reserve.
”The data is strong enough to give the Fed a clean slate in focusing largely on inflation repercussions of the hurricane and higher commodity prices, rather than the growth implications,” said Mr Ruskin said.
By Christopher Swann in Washington
Published: October 7 2005 13:44 | Last updated: October 7 2005 14:13
Employment in the US fell by just 35,000 in September, despite large scale job losses caused by Hurricane Katrina.
Economists had been forecasting a much larger fall of about 125,000. The figures suggest that the employment market is considerably more robust than previously thought.
There were also sharp upward revisions to job creation in previous months. Employment growth in August was revised up from 169,000 to 211,000 and in July from 242,000 to 277,000.
The employment rate, which is calculated separately, rose from 4.9 per cent to 5.1 per cent.
The Bureau of Labor Statistics estimated that Katrina had detracted just 230,000 from payrolls. Without this, payrolls grew at close to the trend rate.
Over the past 12 months employment has grown at an average rate of 194,000 a month.
The impact of the hurricane was focused in the retail and hospitality sectors.
”This means that the Fed can afford to focus on the inflationary implications of Katrina, confirming their belief that the impact on growth is likely to be modest,” said Alan Ruskin, director of research at 4Cast, the consultancy. “The underlying job creation rate is pretty healthy.”
The rise in hourly wages remained a concern however, rising by 0.2 per cent or 2.6 per cent over the year in September. This continues to lag inflation. The consumer price index has risen by 3.6 per cent in the year to August and some economists expect the headline rate to rise to 4.4 per cent in September.
US Treasury bonds fell on job numbers, with yields rising across all maturities as the market focused on inflationary risks and the increased likelihood of further rate hikes by the Federal Reserve.
”The data is strong enough to give the Fed a clean slate in focusing largely on inflation repercussions of the hurricane and higher commodity prices, rather than the growth implications,” said Mr Ruskin said.
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