Analysis: Job gains from Sandy coming
MAPLEWOOD, N.J. -- Superstorm Sandy had little impact on the nation's unemployment rate in November, the government said Friday. Maybe so, but it doesn't take a fortuneteller to figure out that there will be a positive impact from the Northeast's giant storm last month on employment in the future.
Like Madame Marie, the crystal ball seer of Bruce Springsteen's 4th of July Asbury Park (Sandy) song, one can confidently predict its beneficial effects will eventually show up.
The November employment report is great news on the surface, but it's a statistical glitch. The wave of claims for unemployment benefits that followed Sandy past the beaches of New Jersey and New York didn't crest until after the government's monthly survey used to calculate the unemployment rate was taken.
The wave of claims is receding already -- even before the wave of federal disaster-relief money, which will surely stimulate the regional economy, arrives.
It will take a lot of money and a lot of workers to repair the devastating damage Sandy did to New Jersey.
Anyone who lives here can dead-reckon the economic impact by having seen all the stores shuttered for a week or more after the storm. But the Labor Department's survey of households, which is used to calculate the unemployment rate, comes with two important caveats this month.
The government's survey was conducted the week of Nov. 5 -- a week earlier than usual, to make sure it was done before Thanksgiving, which would have skewed the numbers. And the survey of households counts people as jobless, among other reasons, if they weren't paid that week. Millions of people whose bosses were forgiving of unscheduled absences would have shown up in the monthly survey, understating the storm's impact.
The surge in unemployment benefits claims, caused mostly by the storm, showed up in government reports the week ending Nov. 17. New York and New Jersey reported a increase of 75,000 new claims for unemployment aid, the government said. A week earlier, New York reported a drop in claims, most likely because many government offices still without power were closed, and New Jersey reported a gain of about 5,700.
By the week ended Dec. 1, however, jobless aid claims were dropping sharply. New Jersey's drop of almost 24,000 accounted for nearly all of the nationwide drop of 25,000, and New York's drop of some 6,700 accounted for more than all of the rest.
Recovery efforts will soon start to show up in other economic reports. Signs of an incoming wave of money are already visible.
Recent gains in November auto sales were attributed partly to people spending insurance claim checks to replace flooded and damaged rides with new wheels.
The Obama administration is reportedly preparing to ask for $50 billion in Sandy-related reconstruction aid, promising new jobs to rebuild and repair everything from the beaches in New York and New Jersey to the subway in New York City.
Even if Sandy isn't reflected much in the November jobs report, its impact will begin helping the economy and creating jobs as federal money and private money to repair the region start flowing.