Written By: Ingo Winzer, President of Local Market Monitor, Inc.
The job data for September show some of the effects of the recent hurricanes. Overall, job growth slowed to a 1.2 percent annual rate - down from the 1.5 percent of previous months.
The drop was mainly due to a loss of jobs in retail and at restaurants, as you would expect in storm-ravaged areas. But the big question for the national economy is what comes next? Sure, rebuilding in Texas and Florida will provide a temporary boost in construction-related jobs, but will all the old jobs eventually reappear? The Houston area and Southern Florida have been among the fastest growing parts of the country for decades, so we can expect they will again - eventually.
But outside calamities can also accelerate trends that had been in the works for some time. Storms and floods and fires - because they provide an opportunity for individuals and businesses to re-assess their situation - can be a tipping point for local economies, just ask New Orleans. And with the national economy already running slower, it won't take much for weakness in one part of the country to spread to others through lower demand for goods and services, a lot of which depends more on psychology than immediate need.
Too cataclysmic? Probably. But my job is to anticipate things that might happen, and in a fragile economic environment any number of things can quickly have effects much bigger than we would have thought. Before 2008 who would have guessed the world economy would be felled by sub-prime mortgages?
In September, jobs were up 1 percent in manufacturing, 1.8 percent in finance, 2.6 percent in business services, 2 percent in healthcare, 1.4 percent at restaurants - and were down 0.4 percent in retail. Unemployment was 4.2 percent.