Saturday 21 April 2018

US jobs up despite Superstorm Sandy

A woman fills out an application at the Fort Lauderdale Career Fair in Dania Beach, Florida (AP)
A woman fills out an application at the Fort Lauderdale Career Fair in Dania Beach, Florida (AP)
A couple shop for groceries by torchlight in the Tribeca neighbourhood of New York following Superstorm Sandy (AP)

The US economy added 146,000 jobs in November and the unemployment rate fell to 7.7%, the lowest since December 2008, with the government saying Superstorm Sandy had only a minimal effect on the figures.

The Labour Department's report offered a mixed picture for the economy. Hiring remained steady during the storm and in the face of looming tax increases, but the government said employers added 49,000 fewer jobs in October and September than initially estimated.

And the unemployment rate fell to a four-year low in November from 7.9% in October mostly because more people stopped looking for work and were not counted as unemployed.

There were signs that the storm disrupted economic activity. Construction employment dropped 20,000, and weather prevented 369,000 people from getting to work - the most in almost two years. They were still counted as employed.

Stock futures jumped after the report. Dow Jones industrial average futures were down 20 points in the minutes before the report came out, and just after were up 70 points. As money moved into stocks, it moved out of safer bonds. The yield on the benchmark 10-year US Treasury note, which moves opposite the price, rose to 1.63% from 1.58% just before the report.

Since July, the economy has added an average of 158,000 jobs a month. That is a modest pickup from 146,000 in the first six months of the year. The increase suggests employers are not yet delaying hiring decisions because of the "fiscal cliff" - the combination of sharp tax increases and spending cuts that are set to take effect next year without a budget deal.

Retailers added 53,000 positions while temporary help companies added 18,000 and education and healthcare also gained 18,000. Car manufacturers added nearly 10,000 jobs. Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that probably reflects the layoff of workers at Hostess.

Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the north-east.

The US grew at a solid 2.7% annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5% rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. That is not enough growth to lower the unemployment rate.

The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October and work interruptions caused by Sandy reduced wages and salaries that month by about 18 billion dollars (£11.2 billion) at an annual rate, the government said. Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the north-east after the storm.

Press Association

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