U.S. loses 33,000 jobs after hurricanes slam Texas, Florida

Businesses lost 33,000 jobs in September, the Labor Department said Friday, due largely to effects from Hurricanes Harvey and Irma.

It's the first monthly job loss in six years in an economy that has added a monthly average of 172,000 jobs this year. Economists had been expecting about 80,000 jobs to be added.

The two storms inflicted heavy damage on Texas, Florida and other parts of the Southeast. Thousands of businesses had to shut their doors, leaving many people temporarily out of work and causing slower job growth in some industries. Roughly 1.5 million people were unable to work last month because of the weather, the government said, the most in 20 years. 

"Watch for revisions in the coming months," said Glassdoor.com chief economist Andrew Chamberlain in a note. "A very similar report occurred in September 2005 following Hurricane Katrina, where job losses were later reversed by revisions and the economy ultimately created jobs."

Huge job losses in food services and drinking places led the drop, with the sector losing 105,000 jobs in September, reflecting damage to the Gulf Coast's tourism industry. Health care added 23,000 jobs, similar to its monthly average this year. Professional and business services added a below-trend 13,000 jobs. 

Hourly workers who couldn't work and missed a paycheck were counted as not working, which lowered September's job totals. That's true even if those employees returned to work after the storm passed.

The unemployment rate dropped to 4.2 percent, from 4.4 percent the month before. That is the lowest level since February 2001. The rate fell because it is calculated with a separate survey of households. That survey counted people as employed even if they were temporarily off work because of the storms.

Looking past the hurricanes' impact, the job market and economy generally look healthy. 

"The decline in unemployment together with the rise in the labor force participation rate suggest that the labor market is holding strong," said Cathy Barrera, chief economic adviser for ZipRecruiter.

Some economists expect job growth to rebound in the coming months as businesses in the U.S. states affected by the hurricanes reopen and construction companies ramp up repair and renovation work.

And there are signs that a rebound from the hurricanes is already boosting the economy. Auto sales, which had been lackluster this year, jumped 6.1 percent to more than 1.5 million in September from a year ago, according to Autodata Corp., as Americans began to replace cars destroyed by the storms. That increase in purchases should soon lead automakers to step up production.

If the hiring report in October or November rebounds, economists and the Federal Reserve may find it hard to assess the state of the economy with any precision over the next couple of months. Even so, most Fed watchers expect the central bank to raise its benchmark interest rate when it meets in December.