US Hiring Last Month Was Likely Held Back By Sandy
Many workers who were temporarily dropped from payrolls because of Sandy would still consider themselves employed. As a result, the unemployment rate might not change much, if at all, for November.
Tens of thousands of people were put at least temporarily out of work. Two weeks after the storm hit, about 75,000 people in New York and New Jersey applied for unemployment benefits.
Several economists estimate that Sandy might lower the government's count of company payrolls by as many as 150,000. Those estimates are based in part on the effects of previous storms, such as Hurricane Katrina in 2005.
Kevin Cummins, U.S. economist at UBS, noted that Sandy hit a heavily populated area where many jobs pay above-average wages. The average weekly pay figure included in the jobs report is likely to decline as a result.ADP, a payroll provider, said Wednesday that private companies added 118,000 jobs in November, down from 157,000 in the previous month. Mark Zandi, chief economist at Moody's Analytics, which helps compile data for ADP, estimated that the storm lowered the job gains by about 86,000. But the payroll losses from the storm could be higher in the government's total. That's because ADP counts people as employed if they remain on a payroll â¿¿ even if they're not paid. By contrast, the government counts people as employed only if they're paid. The effect on hiring from impending tax increases and federal spending cuts â¿¿ the "fiscal cliff"â¿¿ is harder to quantify. Those measures are set to take effect in January unless Congress and the White House reach a budget deal first. Companies might not be cutting jobs because of the fiscal cliff. But the uncertainty surrounding the outcome is likely delaying some hiring, economists say. Carl Riccadonna, an economist at Deutsche Bank, said several reports show companies are spending less on large equipment. That suggests they're probably postponing some hiring, too.
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