Hurricanes, Boeing strike likely cut at least 100,000 jobs from US payrolls in October
2:18 pm Tuesday, November 19th, 2024
By Lucia Mutikani
WASHINGTON (Reuters) -Employment dropped considerably in Washington State and Florida in October, suggesting that a strike by factory workers at Boeing and Hurricane Helene accounted for much of the abrupt slowdown in U.S. job growth last month.
The Labor Department’s state employment and unemployment report on Tuesday showed nonfarm payroll employment fell by 38,000 jobs in Florida last month and declined by 35,900 jobs in Washington State. Helene hit Florida’s Big Bend region as a powerful Category 4 hurricane in late September, before cutting a destructive path through the South region.
Payrolls also fell in North Carolina, South Carolina, Virginia and Tennessee. They barely rose in Georgia.
J.P. Morgan economist Abiel Reinhart estimated that the hurricanes had subtracted about 85,000 jobs from payrolls in October. Reinhart based his estimate on comparison of the October payrolls change in the states with their 6-month average. Others favored comparing the change to the three-month average, which suggested a roughly 65,000 hit.
“There may have been some slowdown in payroll growth in these states recently that would favor using the 3-month average for comparison, though, given that state data can be noisy, we think it is also fair to use a longer comparison window,” said Reinhart. “Comparing with the 12-month average would give a 90,000 drag.”
Boeing factory workers on the West Coast went on a seven-week strike, before accepting a new contract early this month.
Economists estimated that the strike and hurricane probably subtracted between 100,000 and 125,000 jobs from payrolls last month. Overall nonfarm payrolls increased by a paltry 12,000 jobs in October, the fewest since December 2020, after rising 223,000 in September. “The ‘clean’ payroll read would have been closer to 135,000-140,000, compared with a three- and six-month trailing average of 148,000,” said Reinhart.
With the strike over and rebuilding in the areas devastated by Helene underway, a rebound in job growth is expected in November. First-time applications for state unemployment benefits have already dropped from a 14-month high touched in early October.
“What today’s data means is that we have 109,000 as a base for November before we consider any actual payrolls growth,” said James Knightley, chief international economist at ING. “The striking workers have now returned to work and the approximately 65,000 people who weren’t counted in October because of the hurricane will be there in the November data.”
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
