What could have been very ugly turned out to be a surprise. On Friday, the US government released its usual quarterly advanced estimate of GDP growth for the economy. Despite two natural calamities, Hurricane Harvey and Irma, the nation's economy expanded at a 3% annual pace, a robust rate that surprisd many analysts.
Before the hurricanes developed above the warm equatorial waters, the economy was expected to grow at an annualized rate of 2.7% in the three months ending September. After the storms the average estimate from economists fell to 2.4%. That lower figure didn't even account for the impact of Hurricane Maria on Puerto's Rico output, either, since Puerto Rico isn't included in the government data.
“This economic cycle is more complex than most economic cycles,” says Nathan Blain, global leader, strategy execution solutions at Korn Ferry in Washington D.C. “Most cycles are about scaling up or down in the level of output, such as more or fewer cars sold, more or fewer hotel rooms booked.” This cycle has been different, he says, because new technology has meant increased efficiencies, creating an almost constant churn in the labor market.
Anyone who reads the news will have noticed this, and at the same time, such layoffs have been accompanied by economic growth resulting in new jobs, some of which never existed before. “We see the waves on top of the water, and the labor turnover is the undertow, and it is muddying the waters,” Blain says.