Tag Archives: Hurricanes

House Democrats file bill to fund U.S. government but leave out new farm money

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The U.S. Congress this week will consider legislation funding the federal government through mid-December, with lawmakers hoping to avoid the spectacle of a government shutdown amid a pandemic and just weeks before the Nov. 3 elections.

House Democrats announced Monday they had filed the legislation, which leaves out new money that President Donald Trump wanted for farmers. A Democratic aide said the bill could be on the House floor as soon as Tuesday. The Senate could then act later this week.

The new federal fiscal year starts on Oct. 1.

The bill is designed to give lawmakers more time to work out federal spending for the period through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

The spending proposal “will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year,” House Speaker Nancy Pelosi said in a statement.

But the measure’s December end date will require Congress to return to the government funding question again during its post-election lame-duck session, either during or after what could be a bruising fight to confirm Trump’s third Supreme Court nominee after the death of Supreme Court Justice Ruth Bader Ginsburg.

And the legislation does not include $21.1 billion the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered this a “blank check” for “political favors,” said a House Democratic aide who asked not to be named. Trump promised more farm aid during a rally in Wisconsin last week.

Republicans were not happy. “House Democrats’ rough draft of a government funding bill shamefully leaves out key relief and support that American farmers need. This is no time to add insult to injury and defund help for farmers and rural America,” Senate Majority Leader Mitch McConnell wrote on Twitter. Republicans could seek to amend the document to add in the provision.

The bill proposes spending $14 billion to shore up a trust fund that pays for airport improvements and air traffic control

operations. It also proposes extending surface transportation funding for another year, directing $13.6 billion to maintain current spending levels on highways and mass transit.

Pelosi said the bill would also save America’s older citizens from an increase in Medicare health insurance premiums of up to $50 per month.

Congressional Democrats have had a stormy relationship with the White House over federal funding since Trump took office early in 2017. He has sought deep cuts in domestic spending while ramping up military funds.

(Reporting by Richard Cowan and Susan Cornwell; additional reporting by David Shepardson and Doina Chiacu; Editing by Scott Malone and Steve Orlofsky)

this week will consider legislation funding the federal government through mid-December, with lawmakers hoping to avoid the spectacle of a government shutdown amid a pandemic and just weeks before the Nov. 3 elections.

House Democrats announced Monday they had filed the legislation, which leaves out new money that President Donald Trump wanted for farmers. A Democratic aide said the bill could be on the House floor as soon as Tuesday. The Senate could then act later this week.

The new federal fiscal year starts on Oct. 1.

The bill is designed to give lawmakers more time to work out federal spending for the period through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

The spending proposal “will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year,” House Speaker Nancy Pelosi said in a statement.

But the measure’s December end date will require Congress to return to the government funding question again during its post-election lame-duck session, either during or after what could be a bruising fight to confirm Trump’s third Supreme Court nominee after the death of Supreme Court Justice Ruth Bader Ginsburg.

And the legislation does not include $21.1 billion the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered this a “blank check” for “political favors,” said a House Democratic aide who asked not to be named. Trump promised more farm aid during a rally in Wisconsin last week.

Republicans were not happy. “House Democrats’ rough draft of a government funding bill shamefully leaves out key relief and support that American farmers need. This is no time to add insult to injury and defund help for farmers and rural America,” Senate Majority Leader Mitch McConnell wrote on Twitter. Republicans could seek to amend the document to add in the provision.

The bill proposes spending $14 billion to shore up a trust fund that pays for airport improvements and air traffic control

operations. It also proposes extending surface transportation funding for another year, directing $13.6 billion to maintain current spending levels on highways and mass transit.

Pelosi said the bill would also save America’s older citizens from an increase in Medicare health insurance premiums of up to $50 per month.

Congressional Democrats have had a stormy relationship with the White House over federal funding since Trump took office early in 2017. He has sought deep cuts in domestic spending while ramping up military funds.

(Reporting by Richard Cowan and Susan Cornwell; additional reporting by David Shepardson and Doina Chiacu; Editing by Scott Malone and Steve Orlofsky)

White House to announce $11.6 billion aid for Puerto Rico: Fox News

WASHINGTON (Reuters) – The White House plans to announce an $11.6 billion aid package for Puerto Rico, focused on the territory’s energy and education systems, to help the island recover from the devastation brought by 2017’s Hurricane Maria, Fox News reported on Friday, citing unnamed sources.

Puerto Rico was already struggling financially before the deadly hurricane struck three years ago, and filed a form of municipal bankruptcy for the commonwealth in 2017 to restructure about $120 billion of debt and obligations.

Since then, the U.S. commonwealth has been hit by more hurricanes, earthquakes, the coronavirus pandemic and political upheaval, and has been the target of increased federal scrutiny into its use of U.S. aid. A large portion of its financial distress was linked to the territory’s power utility.

(Reporting by Lisa Lambert; editing by Susan Heavey and Jonathan Oatis)

Between two storms: Caribbean braces for hurricanes in coronavirus era

By Sarah Marsh and Rodrigo Campos

HAVANA/NEW YORK (Reuters) – Ken Hutton is worried Great Abaco Island in the Bahamas where he lives is far from rebuilt after being devastated by Hurricane Dorian last year yet he is bracing for another hurricane season in the midst of the coronavirus pandemic.

The business consultant feels lucky to have survived Dorian, which tore the hurricane shutters off his house and sucked out the windows.

Yet there is still no running water or power in his area – he relies on a generator and a well – and many of the organizations that had been helping to rebuild suspended work because of the pandemic.

“We are still in no position to be ready for another hurricane,” he told Reuters Tuesday. Already, the Caribbean has been hit by two tropical storms before the official start of the hurricane season on June 1, one of which started right over the Bahamas, Hutton added.

“There are lots of people walking around here now with post-traumatic stress disorder,” he said.

Hurricane Dorian caused $3.4 billion in damages – more than a quarter of the annual output of the Bahamas or the equivalent of the United States losing the combined outputs of California, Texas and Florida, according to the Inter-American Development Bank.

Across the Caribbean, island nations are now facing the double whammy of a hurricane season forecast to be more active than usual combined with a pandemic that has already drained public coffers and leveled tourism, one of its top earners.

The National Oceanic and Atmospheric Administration last week forecast 13-19 named storms this year, following 18 named storms last year and 15 in 2018, both above the average of 12.

But the Caribbean has used up much of the fiscal buffers it would usually have readied to respond to hurricane season, Caribbean Development Bank President Warren Smith said.

Countries have tapped typical sources of external emergency financing, like the International Monetary Fund (IMF), to respond to the coronavirus crisis, further limiting their funding options.

Meanwhile, new health protocols for hurricane season prep comes at an added cost. The Caribbean Disaster Emergency Management Agency (CDEMA) has revised guidelines to prevent the virus’ spread, including social distancing, personal protective equipment and hand cleaning facilities in shelters, said CDEMA head Elizabeth Riley.

“We can’t put as many people into a shelter (with social distancing), which means we must have many more shelters available,” St Lucia Prime Minister Allen Chastanet told Reuters.

ECONOMIC STORM

Caribbean nations have had to absorb the high costs of managing virus outbreaks even as they have lost revenue from the stop in tourism caused by border closures and lockdowns, while also being forced to provide a welfare safety net to more people.

The economic outlook does not look set to improve any time soon, with the Caribbean facing a regional contraction of 6.2 % according to the IMF.

“Small island states rely heavily on tourism and remittances. Both are now at a standstill,” United Nations head Antonio Guterres said on Thursday. “Households that had a secure income are at imminent risk of poverty and hunger.”

He added that alleviating “crushing” debt “must be extended to all developing and middle-income countries” that request forbearance as they lose access to their main financial markets.

But it is not all doom and gloom. In Cuba, a meme went viral on social media in recent weeks appearing to present a duel for television airtime between the country’s chief epidemiologist and its most renowned weatherman as they cover the two crises.

The weatherman, Jose Rubiera, told Reuters much of what happens will depend on each storm’s route.

“One single hurricane can be devastating whereas you can have many that don’t hit,” he said. “It’s all very relative, but the one rule of thumb is to always be well prepared.”

(Reporting by Sarah Marsh in Havana and Rodrigo Campos in New York; Additional Reporting by Sarah Peter in Castries, St Lucia, Nelson Acosta in Havana and Karin Strohecker in London; Editing by Daniel Flynn and Aurora Ellis)

Rising U.S. losses from powerful hurricanes flag need for better protection

A police car is submerged in New Orleans East August 31, 2005 after Hurricane Katrina hit the area. Authorities struggled on Wednesday to evacuate thousands of people from hurricane-battered New Orleans as food and water grew scarce and looters raided stores, [while U.S. President George W. Bush said it would take years to recover from the devastation.]

Rising U.S. losses from powerful hurricanes flag need for better protection
By Anna Scholz-Carlson

LONDON (Thomson Reuters Foundation) – Only a few U.S. states are taking significant steps to reduce hurricane risks, as a study this week showed the most damaging storms are now three times as frequent as a century ago and have become the costliest type of disaster, scientists said.

Using a new method, a team at the University of Copenhagen’s Niels Bohr Institute found the frequency of the worst hurricanes had increased 330% over the last century in the United States.

But many government authorities in the country remain unprepared to deal with the surging risk, said Natalie Peyronnin Snider, senior director of coastal resilience for the Environmental Defense Fund (EDF), a U.S.-based advocacy group.

Getting ready would require policy and ground-level changes, including efforts to boost coastal protection, she said.

In a study published in the journal Proceedings of the National Academy of Sciences of the United States of America (PNAS), University of Copenhagen scientists looked at parts of the United States hit by hurricanes in the last century, analysing changes in wealth and population densities to compare losses over time.

Previous research suggested the growing costs of damage from storms were largely due to costlier infrastructure and homes in their path, rather than a rise in the strength or frequency of hurricanes themselves, said Aslak Grinsted, a study lead author.

But the new work showed the growing number of powerful hurricanes was the key factor in increasing losses, he said.

Having clearer information should help communities plan ahead to curb losses, he told the Thomson Reuters Foundation.

Louisiana is one of the few states that has a comprehensive plan to deal with a growing hurricane threat, said EDF’s Snider.

In 2012, it launched a $50-billion Coastal Master Plan to elevate homes with severe flooding risk, create more wetlands, restore marshes and create rock breakwaters to better protect communities from surging storms.

The effort aims to help the southern state better weather hurricanes over the next 50 years, according to the Louisiana Coastal Protection and Restoration Authority website.

The plan was in part a response to severe losses from Hurricane Katrina in 2005, it noted.

Snider said using natural systems to curb hurricane risk – such as wetlands that can absorb excess water and prevent flooding or oyster-covered reefs to absorb wave energy – are cost-effective ways to curb damage from powerful hurricanes.

But Louisiana is not the only state looking to lower its hurricane risks.

In New York, a community-led project aims to restore 1 billion live oysters to New York Harbor by 2035, in part to tackle storm threats, according to its website.

Still, federal and state governments need to do more to protect their people, assets and ecosystems, Snider said.

“It’s really important that we start to be proactive and aggressive … in building resilience in our systems, which not only pays off financially but also for the health of communities,” she said.

Each dollar spent to cut disaster risk can save six dollars otherwise spent recovering after a disaster, she added.

(Reporting by Anna Scholz-Carlson; editing by Laurie Goering and Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate)

Catastrophes set to drive 2020 reinsurance rates higher

FILE PHOTO: An "Emergency shelter" sign points to the Pedro Menendez High School ahead of the arrival of Hurricane Dorian in St. Augustine, Florida, U.S., September 2, 2019. REUTERS/Marco Bello - RC1823A64B90/File Photo

By Carolyn Cohn and Lena Masri

LONDON (Reuters) – Big insurance losses from hurricanes, wildfires and other natural disasters over the past two years are set to push reinsurance renewal rates higher in January, ratings agencies said.

After falling for several years due to competition and fewer natural disasters, renewal rates have started to climb in the past couple of years and for 2020 are set to rise on average by as much as 5%.

However, as Hurricane Dorian ravages the Bahamas and bears down on the United States, Fitch, Moody’s and S&P Global said some rates could jump by much more than that.

S&P said rates would likely rise by around 5%, Moody’s expected rises of 0-5%, while Fitch predicted 1-2%, in briefings ahead of the reinsurance industry’s annual conference in Monte Carlo which begins on Saturday.

Reinsurers such as Swiss Re, Munich Re, and the Lloyd’s of London market help insurers share the risks of disasters in return for part of the premium.

“It’s not a hard market but it’s a hardening market, there’s more positive momentum,” Ali Karakuyu, lead analyst at S&P Global, told a media briefing.

Fellow analyst David Masters said the industry was likely to see “mid-single-digit price increases” as a result.

Insurers are increasingly concerned about the impact of bad weather linked to climate change, with an increase in wildfires in California among the most costly in recent years, something S&P said could see rates there jump 30-70%.

“This market remains in disarray, which will fuel further rate increases,” a slide from the S&P presentation said.

Analysts at UBS estimated that the reinsurance industry is in an excess capital position of around $30 billion, but that an estimated $70 billion of natural catastrophe losses in 2019 could erode this excess capital.

Moody’s analysts said lines of business that have been performing badly over the last few years, for example due to losses related to hurricanes in the United States, would see price rises in the mid-teens.

Fitch Senior Director Graham Coutts said he expected average rates to rise 1-2%, similar to the increases seen in January 2019, although further rises could be seen depending on the scale of losses from Dorian and other hurricanes.

(Editing by Simon Jessop/Alexander Smith/Susan Fenton)

Forest fire insurance costs soar

FILE PHOTO: A group of U.S. Forest Service firefighters monitor a back fire while battling to save homes at the Camp Fire in Paradise, California, U.S. November 8, 2018. REUTERS/Stephen Lam/File Photo

MUNICH (Reuters) – Forest fires are becoming increasingly likely because of climate change and cost insurers more than ever, with the deadly fire that ravaged northern California the single most expensive natural disaster in 2018, Munich Re said on Tuesday.

The California wildfire that devastated the small town of Paradise in November caused losses of $16.5 billion, of which $12.5 billion were insured, according to the reinsurer’s annual catastrophe report.

Worldwide natural disasters caused $160 billion in economic damage in 2018. That was down from $350 billion the previous year, but a number of devastating hurricanes had contributed to the high losses in 2017.

Insurers and reinsurers paid out $80 billion for natural disaster claims last year, down from $140 billion a year earlier but almost double the 30-year average of $41 billion, the reinsurer said.

Munich Re board member Torsten Jeworrek said that 2018 was marked by several severe natural disasters with high insured losses.

“These include the unusual coincidence of severe cyclones in the U.S. and Japan, and devastating forest fires in California,” he said, adding that climate change appears to be making such large fires more common.

Insurers spent $18 billion on two huge fires in the United States in 2018 – equivalent to one in every four dollars they paid out as a result of natural disasters.

Ernst Rauch, the reinsurer’s chief climatologist, told Reuters that forest fires were entering a whole new dimension, costing tens of billions of dollars.

“Higher and higher temperatures are leading to ever greater droughts, and high humidity in the winter means that shrubbery grows quickly, creating an easily flammable material in dry summers,” he said.

Rauch said it was questionable whether areas at high risk could continue to be populated without taking additional measures, such as building houses further from forests and with better safety standards.

In Europe, an unusually hot summer caused a drought that wrought considerable damage on the agricultural sector and was the continent’s most expensive natural disaster at $3.9 billion. However, only a fraction of those losses were insured.

Reinsurers act as a financial backstop to insurance companies, paying a chunk of the big claims for storms or earthquakes in exchange for part of the policy premiums.

Hurricanes and typhoons caused $56 billion of damage last year. Hurricane Michael, which wrought devastation in Florida, was the most expensive for insurers, causing losses of $10 billion.

The review gave no claims figures for Munich Re itself. The reinsurer is due to report fourth-quarter results on Feb. 6.

(Reporting by Alexander Huebner; Writing by Caroline Copley; Editing by David Goodman)

U.S. agency says will keep providing water, other essentials in Puerto Rico

A car is partially buried under the remains of a building, after Hurricane Maria hit the island in September, in Humacao, Puerto Rico January 25, 2018.

By Nick Brown

NEW YORK (Reuters) – The U.S. Federal Emergency Management Agency said on Wednesday it would continue providing water, meals and other essentials to hurricane-ravaged Puerto Rico despite earlier reports its humanitarian mission in the U.S. territory would end on Wednesday.

“There was never, and is not now, a decision to stop distributing commodities on the island,” FEMA said in a written statement on Wednesday evening.

Puerto Rico is struggling to recover from Hurricane Maria, which hit on Sept. 20. The storm killed dozens and left the entire island without power at a time when it was already trudging through the largest government bankruptcy in U.S. history, with some $120 billion in combined bond and pension debt.

Some Puerto Rican and U.S. politicians had criticized FEMA this week after NPR reported on Monday that FEMA’s mission in Puerto Rico was coming to an end, citing a spokesman for the agency.

On Tuesday, FEMA reversed course, saying the initial Jan. 31 end date had been relayed in error.

Democratic U.S. Senator Bill Nelson, speaking on the Senate Floor on Monday, had said it would be “unconscionable” and “a travesty” to cut off aid in Puerto Rico, where nearly a third of the island’s 3.4 million U.S. citizens still lack power more than four months after the storm.

Eventually, FEMA will hand over responsibility for humanitarian aid to Puerto Rico’s government.

Amid the confusion over the timing of that transition, Puerto Rico’s public safety director, Hector Pesquera, said on Tuesday his administration was still negotiating with FEMA on the timing of the handover.

“We have yet to finish the discussions about when the transition should start,” Pesquera said. “It is important to note that this transition period should last at least two weeks.”

(Reporting by Nick Brown; Editing by James Dalgleish)

2017 second-costliest year on record for natural-disaster insured losses

Cars drive under a partially collapsed utility pole, after the island was hit by Hurricane Maria in September, in Naguabo, Puerto Rico October 20, 2017.

(Reuters) – Insured losses in the private sector and government-sponsored programs from natural disasters came to $134 billion in 2017, making it the second-costliest year on record, broker Aon Benfield said on Wednesday.

Three major hurricanes in the United States and Caribbean alone led to losses of $100 billion in 2017, according to risk modeling agencies and reinsurers.

That compares with losses of about $74 billion caused by Hurricane Katrina, which hit New Orleans in 2005.

There were 330 natural catastrophes last year, leading to overall economic losses of $353 billion, of which an “unprecedented” 97 percent were caused by weather-related events, according to Aon’s catastrophe report, making 2017 the costliest year on record for weather disasters.

At $132 billion, 2017 was also the costliest year for insurers for weather disasters, with 60 percent of global insurance payouts in the year caused by Hurricanes Harvey, Irma, and Maria.

Weather losses exclude losses from other natural disasters such as earthquakes, volcanic eruptions and tsunamis.

Wildfires caused $14 billion of insurance losses in 2017 – the highest on record for the peril, Aon said.

California faced wildfires in the northern part of the state that resulted in losses to those insured of more than $9 billion in October. Later in December, a sprawling Southern California wildfire become the largest on record in the state.

Other notable weather events in the year included earthquakes in Mexico, floods and Typhoon Hato in China and drought in Southern Europe.

“The insurance industry was well-positioned to handle the cost of the 2017 disasters. Global reinsurer capital was a record $600 billion at the end of third quarter 2017,” Aon said.

As a result, some reinsurers had been expecting double-digit price rises across the board when the Jan. 1 renewals came around after all of last year’s losses.

In the end, however, global property reinsurance prices rose less than expected, with strong competition limiting increases to single-digit percentages.

German reinsurer Munich Re, said this month that insurers will have to pay claims of around $135 billion for 2017, the most ever, following the spate of hurricanes, earthquakes and fires in North America.

(Reporting by Noor Zainab Hussain in Bengaluru; Additional reporting by Carolyn Cohn in London; Editing by Hugh Lawson)

Insurers to pay out record $135 billion for 2017 after hurricanes

The company logo of German reinsurer Munich Re is seen before the company's annual news conference in Munich, Germany, March 16, 2016.

By Tom Sims and Alexander Hübner

FRANKFURT/MUNICH (Reuters) – Insurers will have to pay claims of around $135 billion for 2017, the most ever, following a spate of hurricanes, earthquakes and fires in North America, according to a report published on Thursday.

German reinsurer Munich Re , in its annual natural catastrophe review, also said last year’s total losses, including those not insured, were $330 billion, the second-worst in history after 2011 when an earthquake and tsunami wreaked havoc in Japan.

Although individual events could not be linked directly to climate change, global warming is playing a role, Munich Re said. It expected more frequent extreme events in future.

“We have a new normal,” said Ernst Rauch, head of Munich Re’s Corporate Climate Center, which monitors climate change risks.

“2017 was not an outlier,” he said, noting insured losses have surpassed $100 billion multiple times since 2005. “We must have on our radar the trend of new magnitudes.”

Last year’s hurricanes Harvey, Irma and Maria in the United States and Caribbean, wildfires in California and earthquakes in Mexico destroyed homes, infrastructure and numerous lives.

The disasters also rocked global insurers. Munich Re and Hannover Re both issued profit warnings.

That dealt a blow to a sector already struggling with thin margins, stiff competition and falling prices.

Munich Re’s tally for the industry comes on the back of other estimates that underscored the severity of 2017.

In December, Swiss Re estimated global insured losses from catastrophes would hit $136 billion in 2017, the third-highest on record for the sector, with the United States hardest hit. That figure is not directly comparable to Munich Re’s estimates as it includes man-made disasters.

Reinsurers, which are in the business of insuring insurance, are experts in managing risk and rarely get caught off guard. Analysts have said reinsurers may need to take a fresh look at their risk models as the planet warms and storms become more intense.

A big question for the industry has been whether the run of catastrophes would allow them to achieve higher prices for their coverage, which have been in decline for years.

Early indications suggest modest increases. Global property reinsurance prices rose less than expected in the key Jan. 1 renewal season, with strong competition limiting increases to single digit percentages, brokers said this week.

A turnaround in prices would be the first major reversal since Hurricane Katrina in 2005.

(Editing by Maria Sheahan and Mark Potter)

U.S. job growth speeds up, unemployment rate falls

FILE PHOTO: Job seekers listen to a recruiter at the Colorado Hospital Association job fair in Denver, Colorado, U.S. on October 4, 2017

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in annual wage gains and surge in the number of people dropping out of the work force cast a cloud over the labor market.

Nonfarm payrolls increased by 261,000 jobs last month as 106,000 leisure and hospitality workers returned to work, the Labor Department said in its closely watched employment report on Friday. That was the largest gain since July 2016 but below economists’ expectations for an increase of 310,000 jobs.

Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported. Some aspects of the report, however, were downbeat.

Average hourly earnings slipped by one cent, leaving them unchanged in percentage terms, in part because of the return of the lower-paid industry workers. That lowered the year-on-year increase to 2.4 percent, which was the smallest since February 2016. Wages shot up 0.5 percent in September, lifting the annual increase in that month to 2.9 percent.

Still, October’s job growth acceleration reinforced the Federal Reserve’s assessment on Wednesday that “the labor market has continued to strengthen,” and probably does little to change expectations it will raise interest rates in December. The U.S. central bank has lifted rates twice this year.

“The weakness in wages will not go unnoticed at the Fed, particularly for members that remained more concerned over the inflation outlook,” said Michael Hanson, chief U.S. economist at TD Securities in New York. “Overall, sustained job growth and labor market slack at pre-crisis lows keeps December in play.”

Although the unemployment rate fell to near a 17-year low of 4.1 percent, it was because the labor force dropped by 765,000 after a surprise jump of 575,000 in September.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell four-tenths of a percentage point to 62.7 percent.

Prices of U.S. Treasuries rose after the data. The dollar <.DXY> gained against a basket of currencies and stocks on Wall Street were largely flat.

 

LABOR MARKET TIGHTENING

The sharp moderation in job growth in September was blamed on hurricanes Harvey and Irma, which devastated parts of Texas and Florida in late August and early September and left workers, mostly in lower-paying industries such as leisure and hospitality, temporarily unemployed.

Economists, however, remain optimistic that wage growth will accelerate with the labor market near full employment. Last month’s one-tenth percentage point drop in the unemployment rate took it to its lowest reading since December 2000. The jobless rate is now below the Fed’s median forecast for 2017.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 7.9 percent last month, the lowest level since December 2006, from 8.3 percent in September.

Tepid wage growth supports the view that inflation will continue to undershoot the Fed’s 2 percent target and could raise concerns about consumer spending, which appears to have been largely supported by savings this year.

The economy grew at a 3.0 percent annualized rate in the third quarter. Growth has remained strong even as President Donald Trump and the Republican-led Congress have struggled to enact their economic program.

Republicans in the U.S. House of Representatives on Thursday unveiled a bill that proposed slashing the corporate tax rate to 20 percent from 35 percent, cutting tax rates on individuals and families and ending certain tax breaks. The plan has been met with opposition from small businesses, realtors and homebuilders.

A separate report from the Commerce Department on Friday showed the U.S. trade deficit increased 1.7 percent to $43.5 billion in September as rising exports were offset by a surge in imports. Exports, which were the highest since December 2014, are being buoyed by a weakening dollar and strong global growth.

Monthly job growth has averaged 162,000 over the past three months. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

The slowing job growth trend largely reflects employers’ difficulties in finding qualified workers. Some economists believe the impact of the hurricanes was still holding back employment growth.

Private payrolls surged by 219,000 jobs in October after falling by 3,000 in September. Manufacturing employment increased by 24,000 jobs. The retail sector lost 8,300 jobs last month.

Construction payrolls gained 11,000 in October, likely boosted by hiring related to the clean-up and rebuilding efforts in the wake of the hurricanes. There were increases in professional and business services payrolls. Healthcare employment also rose last month.

 

(Reporting by Lucia Mutikani; Editing by Paul Simao)