W.H.’s Bernstein on 12K Jobs Number: Hurricanes and Strikes Are to Blame

EXCERPT:

BERNSTEIN: "Well, the underlying U.S. economy remains very strong. We have a very supportive data flow for this week, but we know that there were two powerful forces leading to negative and temporary impacts on payroll growth. Those were, of course, the hurricanes that really hit the southeastern United States, wide swaths therein, and the strikes. And if you account for those factors, the underlying pace of payroll job growth is still healthy, probably in the 150,000 range. That’s enough to keep the unemployment rate steady. In fact, the unemployment rate, which doesn’t suffer from the same distortions as the payroll count due to the way the surveys are constructed, held at 4.1%, solid wage growth. Of course, earlier in the week, strong GDP growth, low inflation, rising real wages and incomes. So take out the distortions, the temporary distortions from these two forces, the U.S. economy remains solid as ever."