Lucia Mutikani
WASHINGTON (Reuters) – Employment in Washington state and Florida fell sharply in October, suggesting the Boeing (NYSE:) factory worker strike and Hurricane Helen accounted for much of the sharp slowdown in U.S. job growth last month.
Last month, nonfarm payroll employment fell by 38,000 jobs in Florida and by 35,900 jobs in Washington state, according to the Labor Department’s state employment and unemployment report released Tuesday. Helene struck Florida’s Big Bend region as a powerful Category 4 hurricane in late September before cutting a destructive path through the South.
Wages also decreased in North Carolina, South Carolina, Virginia and Tennessee. In Georgia, it barely grew.
Abiel Reinhart, an economist at J.P. Morgan, estimated that about 85,000 jobs were lost on the payroll in October due to the hurricane. Reinhart based his estimates by comparing each state’s October wage change to its six-month average. Others preferred to compare this change to a three-month average, which suggests roughly 65,000 hits.
“Wage growth has slowed slightly in these states recently, so it may be advantageous to use a three-month average for comparison. However, given that state data can be noisy, we think it is also fair to use a longer comparison period.” Reinhardt said. “Compared to the 12-month average, that’s a 90,000 drag.”
Workers at Boeing plants on the West Coast went on a seven-week strike earlier this month before accepting a new contract.
Economists estimate that between 100,000 and 125,000 jobs may have been lost on payrolls last month due to the strike and the hurricane. Total nonfarm payrolls were at 12,000 jobs in October, the lowest since December 2020, after an increase of 223,000 in September. “The ‘clean’ payroll figure would have been closer to 135,000-140,000 compared to an average of 148,000 after three and six months,” Reinhart said.
Job growth is expected to rebound in November as the strike ends and rebuilding of areas devastated by Helen gets underway. First-time applications for state unemployment benefits have already fallen from a 14-month high reached in early October.
James Knightley, chief international economist at ING, said: “What today’s data means is that the baseline for November was 109,000 before taking into account actual pay growth.” “Striking workers have now returned to work and approximately 65,000 people who were not counted in October due to the hurricane will be included in the November data.”
