Floyd Weakens an Already Soft September Jobs Report - TheStreet

Floyd Weakens an Already Soft September Jobs Report

But wages rose more than expected, feeding the market's inflation fears.
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Nonfarm payrolls

fell by 8,000 in September, as Hurricane Floyd had an unexpected effect on the job rate, according to the

Labor Department

. Labor said about 10% of its unemployment survey was affected by the hurricane, meaning that job growth would still have been soft in September. The

unemployment rate

remained steady at 4.2%, and

average hourly earnings

rose by 0.5%. The

weekly workweek

, also clearly affected by the hurricane, fell to 34.4 hours.

Economists were expecting 218,000 in new nonfarm payrolls in September, according to

Reuters

. The Labor Department said job growth would only have been approximately 50,000 without the hurricane, so it's a soft month. Economists said seasonal adjustments have caused September figures to fall short of estimates in past years, and that clearly happened this year.

The bond market rose quickly on the news before easing back, but the rise in average hourly earnings will probably worry a

Fed

already concerned about wage pressures. The forecast for average hourly earnings was for a 0.3% increase. On a year-over-year basis, average hourly wages are rising at 3.8% rate, but that's still lower than the 4.1% rate at this time last year. Average hourly wages rose by 7 cents to $13.37 in September, up from August's revised $13.30 figure.

Employment in the manufacturing sector fell by 21,000 for the month, compared with a revised 77,000 decline in August. Originally, manufacturing employment fell 63,000 in August, and it was expected to reverse itself in September.

The weekly workweek was expected to fall due to the hurricane. The Labor Department's survey was conducted in the same week the hurricane hit. The workweek fell just 0.1 hour because August's figure was revised downward to 34.5 hours from 34.6 hours per week.