Each week, we’ll brief you on notable stats and happenings related to current events impacting the job market now or in the foreseeable future.
The Effect of Hurricanes Harvey and Irma
The full spectrum of after effects from hurricanes Harvey and Irma are as yet unknown, but will be felt for many years to come. The job market will share center stage with other areas of the economy deeply shaken by these catastrophic events.
As the storms pummeled and in some areas leveled cities and towns, the infrastructure of entire companies were also caught in the upheaval. These effects will not only be felt in the areas hit by the storms, but in other areas of the country and world as well.
John Cui, assistant professor of operations at Georgetown University’s McDonough School of Business states, “Yes for sure there’s going to be an increasing number of construction jobs maybe next year and into the next. However, all the other jobs are gone. If you don’t want to work for the construction industry, they have to feed themselves, they have to find jobs. So this is going to lead to re-allocation of the residents. They’re going to go to cities and states that have jobs for them.”
Per LinkedIn’s Workforce Report for September, the seasonally adjusted hiring rate was 1.5% higher in August than in July. Hiring stayed consistent over the summer, showing signs of strength.
Conversely, when taking a look at Houston specifically during the timeframe of August 27th through August 30th, when the storm whipped in and stalled throughout the area, hiring levels saw a sharp decline. The seasonally-adjusted hiring in Houston was down 13.7% from July, and during those four days in particular, was about 40% lower than the year before.
Interestingly, one of the industries that saw a large increase over last year in hiring was oil and energy at 16.3%. While the Houston and Texas coastal areas are being hit on multiple sides of the economy, there are industries that will experience a comeback sooner than others, which we will explore later on in this post. Per Jonathan Smoke, chief economist at Cox Automotive, Harvey ruined 300,000 to 500,000 cars and perhaps far more, early analysis indicates, leaving as much as $2.7 billion to $4.9 billion worth of automotive damage in its wake.
On the tail of Hurricane Harvey, Hurricane Irma came barreling through a string of Caribbean islands to Florida. Kwame Donaldson, an economist at Moody’s Analytics, states that the total economic losses from the storm are likely to be similar to Hurricane Harvey. Moody’s projects Harvey-induced losses from property damage and lost economic output will total $108 billion, though other estimates have been closer to $160 billion.
Florida is the fourth-largest economy in the United States, and the damage brought by Irma could be a serious blow to the state. The damage to the citrus crop could be immense. While oranges are the biggest concern, the state also is one of the largest growers of tomatoes, cucumbers, sugarcane, and watermelons. Chris Hyde, agricultural meteorologist for MDA Weather Services states that orange futures prices have risen 11% and a similar impact could ripple through grocery stores across the U.S. depending on the actual damage.
Another obvious top industry in Florida is tourism. In 2016, the state had over 110 million tourists and over $90 billion for their economy. Theme parks, cruise lines, and other attractions will feel the hit as tourism comes to a halt and slowly begins to increase as the area recovers and tourists find their way back. Some murmurings even mention the storm decreasing the number of folks wanting to retire in the area, as the state has been a hot-bed for retirees for some time now.
This all leads up to massive effects on the job market. For weeks and most likely months during the recovery efforts, many won’t be able to get to work and some may even lose their jobs. Others that were counting on starting a new job will now have been delayed, and in some cases, indefinitely. Moving forward, though, certain industries will see an uptick in open roles. Homes and businesses will need to be rebuilt and consumers will begin making those purchases that were put off (in addition to new needs such as appliances, furniture, etc). As cleanup continues, services for waste removal and environmental cleanup will be needed. Those 500,000 cars that were destroyed? They’ll need to be replaced – car dealerships will also need to staff up and find ways to increase their inventory…and fast.
As reported this month in a report from the US Bureau of Labor Statistics, the number of job openings increased .9% in July to reach a record high of 6.17 million.
Job openings increased in a number of industries with the largest increases occurring in other services, up by 111,000; transportation, warehousing, and utilities, up by 70,000; and educational services, up by 26,000. Job openings decreased in healthcare and social assistance by 72,000; state and local government, excluding education, by 46,000; and federal government by 21,000.