Hiring by U.S. businesses was hampered in September by Hurricanes Harvey and Irma, with jobs gains being held down to the lowest level in nearly a year.
Private-sector employers added 135,000 jobs last month, the fewest since October 2016 when hiring dropped to 62,000, according to the ADP’s national employment report released on Wednesday.
{mosads}”Extracting from the effects of the storms, which are temporary, the labor market is fine,” said Mark Zandi, chief economist of Moody’s Analytics.
The storms that battered Texas and Florida and surrounding states likely reduced job gains by between 50,000 and 60,000, leading to a sharp drop in hiring from the 228,000 jobs added in August, Zandi said.
Without the storms, hiring would have been closer to about 185,000, the average pace so far this year, he said.
Job growth around 175,000 to 200,000 reflects a healthy labor market and is almost double the rate necessary to absorb growth in the labor force, Zandi said.
Despite the latest speed bump in the data, the labor market remains healthy and is expected to bounce back in the coming months, especially as smaller businesses recover from the storms.
Jobs growth remains broad based across sectors and business sizes, and there is “no noticeable slowing in growth” although the average pace of hiring is slightly slower than between 2013 and 2015 when the labor market finally picked up following a sluggish expansion after the 2008 financial crisis, Zandi said.
The hurricanes hit smaller businesses — those with one to 49 employees — especially retailers, the hardest, causing a loss of 7,000 jobs last month.
Those businesses didn’t have the inventories or employees to quickly reopen their doors after the bad weather.
Zandi estimated that the storms also will affect the government’s data set for release on Friday.
The Labor Department’s data will likely show the addition of 100,000 jobs, which would be lower than the 156,000 in August.
Manufacturers hired 18,000 last month while construction companies added 29,000 workers, the ADP showed.
In other areas, health care firms hired 28,000 and professional and business services added 51,000, according to ADP.