Weak September Jobs Report Shows Negative Growth
- Nov 01, 2017
While much of the concern regarding the first negative jobs in more than seven years can be attributed to the impacts of Hurricanes Harvey and Irma, metropolitan statistical area (MSA) employment numbers for the month of September hint that continued employment growth might finally be coming to an end.
When a run of 83 consecutive months of employment growth finally came to an end in September, there was little noise made about the end of the streak. Normally, the end of such an impressive run would have been covered heavily in the news cycle. Some worried that a negative jobs report would prompt the White House administration to challenge the credibility of the Bureau of Labor Statistics (BLS). If these were the expectations, then the actual reaction was relatively nonexistent. Indeed, much of the concern was dismessed by what seems to be a sensible explanation.
The popular explanation is that the end of the streak was caused by a decline employment in locations that were ravaged by hurricanes Harvey and Irma, and that it should bounce back shortly. While we must wait for the release of the October Employment numbers to see if the comeback will truly manifest, the recent release of MSA employment figures allows us to examine how much employment fell in areas that were hit hardest by the two devastating storms. Further, we can see if losses were concentrated in these metros or if other metros are also incurring job losses.
Losses Not Isolated in Hurricane Effected Metros
Of the 28 metros in hurricane-affected areas, 22 saw a decrease in employment and the area’s total jobs were reduced by 135,000. On an absolute basis, Miami (34,000) and Houston (24,900) incurred the largest losses. The six metros that added jobs in the month were minor, with the largest increase coming from Brownsville-Harlingen, Texas, which added 500 jobs.
Although many of the largest losses in metro employment were in Florida or the Texas coast, many MSAs outside of the hurricane-affected regions also saw losses in employment for the month of September, perhaps signaling that employment growth is beginning to plateau. Of the 354 MSAs not located within Florida or the Texas coast, more than half (187) showed zero or negative employment growth in the month of September. The total growth outpaced the losses, but only by 66,000.
The Importance of Florida to Employment Growth
Perhaps the biggest takeaway from these numbers should be how much the national employment figures of late have been fueled by the vigorous growth in Florida metros. For much of the year prior to the hurricanes, Florida metros led the nation in employment gains. On a year-over-year basis, Orlando had been between three and five percent since the beginning of 2016. Tampa, likewise, was growing well above the nationally average during that same time period, but lost 18,000 jobs in the September figures.
Consequently, a rebound in the national employment numbers is reasonable to expect. Orlando, for example, still increased its total employment by two percent compared to last September, despite the loss of 9,400 jobs from August to September this year. As life returns to normal in Florida and the Texas coast, we presume that hiring will increase as the labor markets return to their previous trajectories, providing a one-time boost to the national numbers over the next few months.
No Reason to Panic… Yet
Nevertheless, some of the MSA numbers suggest that there may be concern on the horizon. Admittedly, the sample sizes the BLS uses on the metro level are small enough that movements in month to month numbers should not lead to panic about the state of the labor market. Further, on a year over year basis most of the metros still show positive gains. Yet that so many MSAs incurred employment losses should at least be enough to make interested parties pay more attention to the metro employment numbers in the coming months.
Photo courtesy of Innovate Impact Media