Hurricanes' Effects on Job Creation Less-than-expected, Inventories Rise

- The Change in Non-farm Payrolls for September was -35K versus estimates of -150K and an upwardly revised 211K in August.
- The Change in Manufacturing Payrolls for September was -27K versus estimates of -33K and an upwardly revised -9K in August.
- The Unemployment Rate for September rose to 5.1% versus estimates of 5.0% and 4.9% in August.
- Average Hourly Earnings for September rose .2% versus estimates of a .2% increase and a .1% gain in August.
- Wholesale Inventories for August rose .5% versus estimates of a .4% increase and a .1% rise in July.

BOTTOM LINE: Hurricane Katrina pushed the US unemployment rate up to 5.1% in September as the economy lost 35,000 jobs, fewer than expected and evidence that the storm wasn’t strong enough to derail the expansion, Bloomberg reported. The hurricanes Katrina and Rita may have eliminated up to 480,000 jobs temporarily, according to the latest estimates from the Congressional Budget Office. I expect job growth to rebound sharply over the coming months, but not back to recent highs.

Stockpiles at US wholesalers rose in August by the most in four months as companies rebuilt inventories to meet growing demand before the two hurricanes ripped into the Gulf Coast, Bloomberg reported. The inventory-to-sales ratio fell to 1.17 months. I expect inventory rebuilding to add to GDP growth through year-end.