Economix Blog: Gauging the Storm’s Impact on Hiring

Just how big an effect will Hurricane Sandy have on employment?

That’s the question looming ahead of Friday’s announcement of the latest employment figures for November by the Bureau of Labor Statistics.

The consensus of economists surveyed by Bloomberg is that the report will show a net gain of 86,000 jobs last month, with the rate of unemployment remaining at 7.9 percent. But many widely followed economists are citing much lower figures for job creation.

Dean Maki, chief United States economist at Barclays, estimates hiring to have increased by only 50,000, a sharp drop from an average of 170,000 new positions added monthly in August, September and October. “This doesn’t dramatically change our outlook,” he said. “It’s evidence of just how powerful an effect Sandy had on the monthly figures.”

Ethan Harris, co-head of global economics at Bank of America Merrill Lynch, is slightly more optimistic, estimating 60,000 jobs were created in November. But he’s quick to point out that the underlying rate of job creation is healthier than the numbers suggest. If it were not for the storm, he estimates hiring would have jumped in November by 140,000.

“The labor market is very much in the recovery stage,” Mr. Harris said. However, he added, “It’s a long way from full health with workers having little negotiating power when it comes to raises.”

Mr. Harris said he would be watching the figures closely for hiring in the retail sector as the holiday shopping season begins. One danger is that consumers will hold back on spending in order to pay for home repairs in the storm’s aftermath, he said.

He is also waiting to see if worries about the fiscal impasse in Washington weigh on consumers. “Before the election, the fiscal cliff was a worry for the business sector,” Mr. Harris said. “Now it’s front page news.”

Economists are also looking for possible upward revisions in estimated job creation for past months, said Nigel Gault, chief United States economist for IHS Global Insight. In October, the economy created an estimated 171,000 jobs, with government statisticians revising their figures for September and August higher.

Article source: http://economix.blogs.nytimes.com/2012/12/06/gauging-the-storms-impact-on-hiring/?partner=rss&emc=rss