Unemployment not as bad as expected in Katrina's wake

October 7, 2005

Economy may bounce back soon

Inman News

Though employment fell in September, the loss was far less than expected in the wake of Hurricane Katrina, the government reported this morning.

The news suggests that the economy might be bouncing back from the hurricane better than expected, though a government economist said it was difficult to accurately quantify the disaster's effects because it's hard to survey the evacuees and inoperative Gulf Coast businesses.

Net employment fell by 35,000 jobs in September and the unemployment rate rose to 5.1 percent from 4.9 percent in August, according to a report by the U.S. Department of Labor Bureau of Labor Statistics.

Excluding the hurricane, the government estimates employment would have risen by about 195,000, in line with job growth for the last year, the bureau said.

"It is clear that Hurricane Katrina adversely affected labor market conditions in September," Philip L. Rones, the deputy commissioner for the Labor Department's Bureau of Labor Statistics, said in prepared remarks for Congress's Joint Economic Committee this morning.

"However, we cannot quantify precisely the overall effects of the disaster and its aftermath on the September employment and unemployment figures. We hope to get additional insight as more data become available," Rones said.

The employment surveys that are the basis of the report were conducted before Hurricane Rita came ashore on Sept. 24.

Economists said the September numbers would likely be revised next month after the government has gathered more data, and that the job losses could increase. The Labor Department revised up the number of jobs added in August (211,000, up from 169,000) and July (277,000 up from 242,000).

Employment in the leisure and hospitality industry, a big part of the New Orleans economy, fell by 80,000 and food service payrolls fell by 54,000, the Labor Department said.

Retail jobs fell by 88,000 after increasing on average by 18,000 a month for the last year. And manufacturing payrolls were down by 27,000, of which 18,000 were striking workers in the aerospace industry, according to the report. An airline strike also drove down the number of jobs in the transportation sector by 8,000, the report said.

But temporary help services had an increase of 32,000 jobs and the construction industry continued growing, adding 23,000 jobs, the department reported.

Average hourly earnings rose by 3 cents, to $16.18 an hour, and the number of hours worked were unchanged at 33.7 hours, the report said.

Copyright 2005 Inman News

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