Hurricanes Harvey and Irma did a number on the September job report. That the storms hit job growth hard during the month is no surprise, and while there was much uncertainty over how bad the hit would be, it was worse than most economists, including me, anticipated.
The biggest economic casualties of the storms were retailers and the hospitality industry. Given that the entire state of Florida was ravaged by Irma at the start of the Bureau of Labor Statistics' survey week, this makes sense. Based on data from payroll-processor ADP, the preponderance of the job losses in these industries were at small businesses.
Fortunately, the rebuilding and recovery from the storms is already in full swing. Vehicle sales, which plunged in August, as dealerships in Texas closed, soared in September as flood-destroyed vehicles were replaced. The October jobs numbers will likely show an outsized gain as construction and other jobs related to the clean-up ramp up. And as insurance money and government aid gets to distressed households and businesses, employment gains into next year should be on the strong side.