Hurricanes Harvey, Irma expected to dim US jobs growth in short term
Hurricanes Harvey, Irma expected to dim US jobs growth in short term
According to a Reuters survey of economists, the Labor Department’s closely watched employment report on Friday will likely show that nonfarm payrolls increased by 90,000 jobs last month after rising by 156,000 in August.
The projected job gains for September would be the second smallest this year and well below the 175,000 monthly average for the 12 months through August. They would follow on the heels of August’s disappointing employment growth, which economists blamed on a seasonal quirk.
Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed.
Economists estimate that Harvey and Irma, which wreaked havoc in Texas and Florida, cut as many as 125,000 jobs from payrolls in September.
“We are going to get a lot of the jobs back and we are going to see hiring related to the clean-up and rebuilding into early 2018 as well,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.
Economists say a weak employment report should not change views the Federal Reserve will raise interest rates in December. Fed Chair Janet Yellen cautioned last month that the hurricanes could “substantially” weigh on September job growth, but expected the effects would “unwind relatively quickly.”
The US central bank said last month it expected “labor market conditions will strengthen somewhat further.”
“Given this, we suspect the financial markets will also take any hurricane-related weakness to the September employment report in stride, maintaining an elevated probability for a December Fed interest rate hike,” said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.
According to the Labor Department, the Texas and Florida areas affected by the storms employed 11.2 million people in March 2017, representing 7.7 percent of US employment.
Excluding the weather impact, economists say the labor market continues to tighten. The employment report would join August consumer spending, industrial production, homebuilding and home sales data in suggesting that the hurricanes will dent economic growth in the third quarter.
Economists estimate that the back-to-back storms, including Hurricane Maria which destroyed infrastructure in Puerto Rico last month, could shave at least six-tenths of a percentage point from third-quarter gross domestic product growth.
Growth estimates for the July-September period are as low as a 1.8 percent annualized rate. The economy grew at a 3.1 percent rate in the second quarter.
Harvey and Irma are not expected to have an impact on the unemployment rate, which is forecast holding steady at 4.4 percent for September. The smaller survey of households from which the jobless rate is derived treats persons as employed regardless of whether they missed work during the reference week and were unpaid as result.
The household survey could reflect the impact of the storms on employment by showing the number of workers who were stranded at home because of bad weather as well as those who were forced to work part-time.
There was probably no impact on the length of the average workweek from the storms.
“There are competing forces at play in September, where hours worked in many sectors will see shutdown-related cuts, while hours worked for clean-up and reconstruction efforts will get extended,” said Ellen Zentner, chief economist at Morgan Stanley in New York.
With the hurricane-driven temporary unemployment concentrated in low-paying industries like retail and leisure and hospitality, average wage growth is forecast picking up.
Average hourly earnings are forecast increasing 0.3 percent in September after rising 0.1 percent in August. Still, the annual increase in wages probably remained stuck at 2.5 percent for a sixth straight month.
Annual wage growth of at least 3.0 percent is needed to raise inflation to the Fed’s 2 percent target, analysts say.
Construction payrolls likely fell in September, bearing the brunt of the bad weather. Manufacturing employment is forecast increasing by 10,000 jobs after surging 36,000 in August, which was the most in four years.
Shopping ‘Star Trek’ style becomes next frontier for most major brands
- The use of smart speakers has expanded the possibilities available through smartphone chatbots or text-based systems, including those from Facebook and Apple.
- Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.
WASHINGTON: Voice shopping using smart speakers and smartphone apps is starting to gain traction among consumers, opening up a new “conversational commerce” channel and potentially disrupting the retail sector.
Devices such as Amazon’s Alexa-powered speakers and Google Home, which use artificial intelligence to respond to voice commands, are offering new choices to consumers who are looking for more convenient ways to order goods and services.
Voice shopping is expected to jump to $40 billion annually in 2022 in the US, from $2 billion today, according to a survey this year by OC&C Strategy Consultants.
“People are liking the convenience and natural interaction of using voice,” said Victoria Petrock of the research firm eMarketer.
“Computing in general is moving more toward voice interface because the technology is more affordable, and people are responding well because they don’t have to type.”
A recent eMarketer survey found 36 percent of US consumers liked the idea of using a home-based assistant such as Amazon Echo for making a purchase.
Amazon’s devices, which hit the market in 2015, were designed in large part to help boost sales, and Google Home was launched a year later.
“This is growing exponentially,” said Mark Taylor, an executive vice president at consultancy Capgemini and co-author of a study on conversational commerce.
“We’re getting very used to asking Alexa or Google to do something on our behalf, which makes it simple to switch and say, ‘Hey Alexa, buy me dog food.’”
Capgemini research shows many consumers are satisfied with voice interactions and that this is growing for search and information as well as for purchases and that this is likely to become a “dominant” mode of consumer action within a few years.
“It’s becoming part of the fabric of our lives,” Taylor said.
The most commonly shopped categories through voice are groceries, entertainment, electronics and clothing, according to OC&C.
For now, Taylor said, most voice-based purchases have been “low consideration goods” such as items consumers have purchased before.
But as people grow comfortable with voice assistants, Taylor sees a potential for growth in “higher consideration” items including insurance or financial services.
An important element will be the tonality and personality established by intelligent assistants that will help companies establish an image or brand.
“People like to talk to human beings because humans give insight and guidance, and AI can do the same thing,” he said.
The “conversational interface” is a tremendous advantage in some situations, said Manlio Carrelli, executive vice president at Live Person, which provides technology for firms in online platforms.
“This is like ‘Star Trek,’” Carrelli told AFP. “I can just say what I want and get it. Consumers don’t care what’s on the back end, they just want to be able to get what they want.”
Carrelli said these systems are important not only for sales, but for customer service — reducing the need for dreaded call centers and saving millions for businesses.
“We’re now entering the mainstream for this market,” Carrelli said. “I don’t think you’ll find a single major brand that isn’t looking at this.”
Walmart last month launched a text-based concierge shopping service called Jetblack, which uses both artificial intelligence and professional assistants offering buying suggestions as part of its effort to compete with Amazon.
But Walmart is one of dozens of retailers offering voice-based shopping through Google Express as well, along with sellers of flowers, hardware, groceries and other goods.
Domino’s Pizza has embraced this technology, allowing orders through Amazon Alexa, Google Home, Facebook Messenger and other platforms.
In France, Google Home devices can be used to shop at the giant retailing group Carrefour. And retailers in China have been partnering tech firms for similar services.
According to OC&C, Amazon Echo speakers are used in around 10 percent of US homes, with 4 percent for Google Home.
According to the report, Apple is lagging behind in this sector as its Siri assistant lacks the AI capabilities of Google, and the new HomePod has only just hit the market.
Apple just this year rolled out “business chat,” enabling consumers to ask questions and place orders through iPhone text or voice commands, and see images of products on the iMessage service. Retailers Lowe’s and Home Depot are among the partners.
Some analysts, however, expect more players to enter the market, with speculation rampant about a speaker from Facebook, which now is allowing business and consumers to connect through Messenger chatbots.
“Voice commerce represents the next major disruption in the retail industry, and just as e-commerce and mobile commerce changed the retail landscape, shopping through smart speaker promises to do the same,” said John Franklin of OC&C.