September Payrolls Higher Than Predicted

Hurricane Katrina drove thousands of people from their jobs, and economists say the jobs picture will worsen before it improves.

In September, 35,000 nonfarm jobs were lost, according to the U.S. Department of Labor, but economists had estimated 150,000 lost jobs in the wake of the Aug. 29 Gulf Coast disaster. They point out, however, that the job loss figure from September could be revised downward because unemployment data from Louisiana and Mississippi are still coming in to Washington.

"When you look at these numbers, and you see the devastation and you see the initial jobless claims every week, you know [lower] numbers eventually have to show up. It's inevitable," Anthony Chan, senior economist at J.P. Morgan Asset Management, told SmartMoney.com. Chan called Friday's Labor Department report "totally inconsistent" with weekly unemployment filings and the scale of the natural disasters.

In preparation for the expected increase in claims, the Labor Department has announced that $63 million would be provided to boost states' unemployment compensation systems.

In the end, the Congressional Budget Office believes that Katrina, along with the Hurricane Rita on Sept. 24, will result in 293,000 and 480,000 lost jobs. For information and eligibility requirements about Disaster Unemployment Assistance, which is open to those who lost jobs in federal disaster areas, go to http://www.doleta.gov/Katrina/LNKDetails.cfm?lnkid=4

The September figures show that 80,000 jobs were lost in leisure and hospitality industries and 88,000 jobs were lost in retail. The unemployment rate rose to 5.1 percent. Some areas gained jobs last month – 52,000 new jobs in professional and business services, 49,000 in education and health and 31,000 in the government.

Economists say that the true impact of both hurricanes will show up in the October jobs report set for a Nov. 4 release. Even though job losses will get worse before they get better, some observers believe the U.S. economy is strong.

"Hurricane Katrina undoubtedly devastated individuals and communities in the Gulf Coast, but on a macro-economic basis it's clear that the U.S. economy has more than enough momentum to absorb the hit and recover quickly," said economist Bill Cheney of John Hancock Financial Services Inc. in Boston, according to Reuters.

You may like these other stories...

Read more from Larry Perry here and in the Today's World of Audits archive.Accounting PrinciplesAccounts Payable and Accrued Expenses: The AICPA's Financial Reporting Framework for Small- and Medium-Sized Entities is...
BKD LLP adds Illinois accounting firm Wolf & Co.Springfield, Missouri-based CPA and advisory firm BKD LLP and Chicago-based accounting firm Wolf & Co. have agreed to merge, the firms announced on Monday. Wolf will...
Ernst & Young fiscal-year revenue rises 6% to $27.4 billionMichael Rapoport of the Wall Street Journal reported late Thursday that Ernst & Young's (EY) global revenue was $27.4 billion in its latest fiscal year,...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.