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.
