Part 1 - The real unemployment rate for October 9th:
Bottom Line: We knew that the September job's report would be a mess in the wake of hurricanes Harvey and Irma. Not only were five states meaningfully impacted by the storms, two of the three largest (Texas and Florida), were the most impacted. The ADP private sector jobs report showed a preview of what we might expect as it demonstrated that small businesses shed jobs during the month. The BLS's government report took it several steps farther as it indicated that 33,000 jobs were lost during the month. Let's take a look at the rest of the picture.
Headline unemployment rate 4.2% (down .2%)
Negative jobs revisions for prior months
Millions unaccounted for by the base reported unemployment rate
Top industries for hiring:
#1 Healthcare (added 23,000 jobs)
#2 Transportation & warehousing (added 22,000 jobs)
#3 Professional & business services (added 13,000 jobs)
The big number that points directly to the destruction caused by the hurricanes is this one:
105,000 jobs were lost in the food service industry
That's the single biggest month of decline in food service in over a decade. Going forward the question will be how many of those jobs bounce back. How many of those small restaurants reopen? How quickly will the rehire? Now for the real unemployment rate...
Actual: 8.3% down from 9.7% (year over year improvement of 14%)
So here are three relevant points:
1. When the long-term unemployed & marginally employed are factored in - the real unemployment remains nearly double the base reported rate
2. 1.7 million are long-term unemployed, 5.1 million are underemployed (part-time seeking full-time work) & 1.6 million are marginally attached to the workforce
3. The labor participation rate improved to 63.1%
4. We can't read too much into this report because of the hurricanes
In part two we'll take a look at the demographics of the unemployed...