Economic guru Larry Kudlow advises savvy investors to look beyond the headline number of Friday’s jobs report.
U.S. employment fell in September for the first time in seven years as Hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring, the latest indication that the storms undercut economic activity in the third quarter, Reuters reported.
The Labor Department said on Friday nonfarm payrolls decreased by 33,000 jobs last month amid a record drop in employment in the leisure and hospitality sector. The decline in payrolls was the first since September 2010.
The department said Harvey and Irma, which wreaked havoc in Texas and Florida in late August and early September, reduced employment last month. But underlying details of the closely watched employment report were upbeat.
The unemployment rate hit a more than 16-1/2-year low of 4.2 percent and annual wage growth accelerated to 2.9 percent.
To be sure, outside of the storms, labor market “seems to be still solid,” experts told Bloomberg.
With the hurricane-driven temporary unemployment concentrated in the low-paying retail and leisure and hospitality industries, average hourly earnings jumped 12 cents or 0.5 percent in September after rising 0.2 percent in August.
The annual increase in wages in September was the largest since December 2016 and followed an upwardly revised 2.7 percent rise in August. The revision to August’s annual increase from 2.5 percent raised hope that wage growth was finally picking up.
“So OK, I like this more people working,” said Kudlow, a Newsmax Finance Insider, radio talk-show host and CNBC senior contributor explained to CNBC.
“And more people prospering,” said the radio host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity,"written with Brian Domitrovic and published by Portfolio.
Labor-force flows data showed the number of Americans not in the labor force a month earlier and found a job in September hit a record high, Bloomberg explained.
The tally of people who didn’t report to work because of bad weather comes from the Labor Department’s survey of households, which reflects the calendar week that includes the 12th of the month. The survey still counts a worker as employed even if they missed that entire week’s work for weather-related reasons, regardless of whether they were paid or not for the time off.
The participation rate, which shows the share of working-age people who are employed or actively looking for work, rose to 63.1 percent, the highest since early 2014. On top of that, the prime-age participation rate -- which covers people ages 25 to 54 -- matched July as the highest since 2010.
The U-6, or underemployment rate, also withstood the weather, falling to a 10-year low of 8.3 percent. The measure includes part-time workers who’d prefer a full-time position and people who want a job but aren’t actively looking. In addition, the number of people working part-time for economic reasons also fell.
“More people picking up wage gains which have been lagging for 15 years under Democrats and Republicans,” said Kudlow, who served as the Trump campaign's senior economic adviser.
“It's a good thing, may I say it is a good thing it is not necessarily an inflation thing at all,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
(Newsmax wire services contributed to this report).
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