Hurricane Sandy had a devastating effect on employment in New Jersey and a fairly large impact on employment in New York, as well. A leading indicator of unemployment is the weekly report of new unemployment insurance claims. A spike in new jobless claims means that a large number of workers were displaced from their jobs. New Jobless claims have quadrupled in New Jersey and doubled in New York in the aftermath of Sandy relative to November 2011. Using these data I estimate that Hurricane Sandy displaced 150,000 workers in the first two weeks after the storm hit, with 70,000 jobs lost in New Jersey and 50,000 lost in New York. These job losses could push the November unemployment rate above 11% in New Jersey and above 9% in New York.
During the weeks of November 10th and November 17th (the most recent weeks for which detailed state data are available) about 96,000 jobless workers in New York filed for first-time unemployment insurance benefits, compared to about 48,000 new claims one year ago. Similarly, almost 92,000 jobless workers in New Jersey filed for first-time unemployment insurance benefits during the weeks of November 10th and November 17th, compared to just over 24,000 new claims one year ago. In the weeks after Sandy the rate at which workers lost jobs is about four times higher in New Jersey and twice as high in New York compared to November 2011.
The following charts compare the year-to-year change in new unemployment insurance claims the weeks of November 10th and November 17th and the corresponding change in claims for the previous 16 weeks (on average). The charts indicate that new jobless claims remain very high in New Jersey while they have dropped recently in New York but remain above 2011 levels. In both states new jobless claims in 2012 were consistently below 2011 levels until Hurricane Sandy hit.
Hurricane Sandy caused about 70,000 people to lose their jobs and file for first-time unemployment insurance benefits in New Jersey and 50,000 in New York during the weeks of November 10th and 17th. These job losses are measured relative to the declines that would have been expected had the storm not hit the New Jersey coast. Using similar methods, I estimate that about 30,000 additional jobs were lost in the rest of the country, possibly due to Hurricane Sandy.
The November jobs report (released on December 7th) is the first one after the presidential election and the first to include data gathered after Hurricane Sandy. The storm’s displacement of 150,000 workers in the past two weeks is enough to increase the U.S. unemployment rate from 7.9% to 8.0%. Hurricane Sandy is also likely to increase the unemployment rate to 11% in New Jersey (from its current 9.7%) and above 9% in New York (from its current 8.7%). The November unemployment rate is based on worker’s labor force status for the week ending November 17th. This means that continued job losses and displacement of workers in the second half of November, especially in New Jersey, will not factor into the November unemployment rate but could possibly cause the unemployment rate to increase further in December.