For everyone in North and South Carolina – stay safe!
Frequently there is a temporary slowdown in several major growth indicators following a large natural disaster. And usually there is a pretty rapid bounce back following the disaster.
It seems likely Hurricane Florence will negatively impact Q3 GDP, September employment and housing.
On employment: This week is the BLS reference week (includes the 12th). Hurricane Irma made landfall during the BLS reference week last year, and the BLS noted:
Hurricane Irma made landfall in Florida on September 10–during the reference period for both the establishment and household surveys–causing severe damage in Florida and other parts of the Southeast. Hurricane Harvey made landfall in Texas on August 25–prior to the September reference periods–resulting in severe damage in Texas and other areas of the Gulf Coast.
Our analysis suggests that the net effect of these hurricanes was to reduce the estimate of total nonfarm payroll employment for September. There was no discernible effect on the national unemployment rate.
Initially the BLS reported 33,000 jobs lost in September 2017, however this was eventually revised up to a gain of 14,000 jobs – keeping the job streak alive.
Something similar might happen this year, with employment being depressed in September – then eventually being revised up, with a bounce back in October.
The first economic indicator to be impacted by the hurricane will probably be weekly unemployment claims. Last year, weekly claims jumped from 238,000 to 293,000 following hurricane Harvey. The size of the jump in claims for next week will give an idea of the impact on employment.
Another early indicator is usually car sales, with car sales falling to 16.45 million SAAR last August (the weakest month of 2017). Since so many cars were damaged from the flooding in Texas last year, sales bounced back sharply.
Stay safe. And expect any impacted indicator to rebound fairly quickly.