Economic Data Impacted by Sandy; November Jobs Report Could Fall Hard
The true economic implications of Hurricane Sandy are coming into sharper focus. Gone are the initial estimates of $20 billion or so in total economic impact. Estimates are now approaching $50 billion . One economist says it could have a similar effect on the jobs market as Hurricane Katrina. The November jobs report could show that payrolls rose just 25,000, wrote Deutsche Bank economist Joseph Lavorgna . "The data reported last week showed preliminary evidence of Hurricane Sandy disrupting economic activity. This was apparent in retail sales, jobless claims, the regional PMIs and industrial production. The sharp backup in claims (+78k) was the largest weekly increase since Hurricane Katrina. As a result, we are concerned there may be an acute hurricane impact on November payrolls. Following Katrina, payrolls slowed from +169k in August 2005 to -35k in September (according to data reported at the time). These figures were ultimately revised to +193k and +66k, respectively, a deceleration of -127k. In the current environment (recall September payrolls rose +171k), the experience from Katrina points to an extremely soft November jobs report—and the latest jobless claims data corroborate this. As a result, we are forecasting just a +25k increase for November payrolls and a one-tenth increase in unemployment (to 8.0%)."