The consecutive landfalls of two hurricanes may distort the US labor market data for October, weaken consumption, and push up prices, bringing uncertainty to the US economy before the election.
Currently, Hurricane &#34;Milton&#34; is approaching Florida, USA, and is expected to be the second super storm to hit the state in two weeks since Hurricane &#34;Helene&#34; made landfall on September 26.
The US National Weather Service predicts that &#34;Milton&#34; may be &#34;the most severe storm to hit the Tampa area in over 100 years.&#34; US President Biden has also issued a similar warning and canceled plans to visit Germany and Angola.
Analysts expect that the impact of the hurricane will be reflected as early as the initial jobless claims data to be released this Thursday, and will affect the non-farm data for October to be released on November 1, just a few days before the US election on November 5. In addition, the super storm will push up food and energy prices and may have an impact on the GDP for the third quarter.
<h2>The strongest storm in Florida in over a century</h2>
Hurricane &#34;Milton&#34; rapidly intensified to the highest level of Category 5 on October 7. Florida has initiated its largest evacuation operation since Hurricane Irma in 2017.
According to the latest information from the National Hurricane Center (NHC) at 05:00 Eastern Time on Tuesday, &#34;Milton&#34; has weakened to Category 4, with maximum winds of 155 miles per hour, moving at 12 miles per hour in a northeastward direction across the warm waters of the Gulf of Mexico, and is expected to make landfall on the Gulf Coast of Florida as a Category 3 storm on Wednesday night or early Thursday.
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According to NHC's forecast, &#34;Milton&#34; is expected to generate a stronger storm surge in the Tampa area compared to Hurricane &#34;Helene&#34; a few weeks ago.
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NHC's peak storm surge forecast shows that &#34;Milton&#34; may create a wall of water up to 15 feet in Tampa Bay, Sarasota, and Venice.
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<h2>Employment data may be the first to be affected</h2>
The consecutive landfalls of two hurricanes will distort US economic data, with employment data likely to be the first affected, possibly reflected in last week's initial jobless claims data ending October 5.
Economists surveyed by FactSet predict that there were 225,000 new claims for unemployment benefits last week, unchanged from the previous week. However, Morgan Stanley expects the hurricanes to increase the number of unemployment benefit claims, with last week's data possibly rising to 235,000, and delays in applying for unemployment benefits in severely affected North Carolina may become apparent later.
The impact of October non-farm payroll data will be more direct. Citigroup's chief economist Andrew Hollenhorst said, &#34;The October employment report may be significantly affected.&#34;
The U.S. Bureau of Labor Statistics (BLS) uses the wage payment period that includes the 12th of the month as the reference period for compiling the monthly employment report. BLS counts individuals who have worked at least one hour during the reference period as part of the employed population.
However, due to the hurricane causing residents in some areas to evacuate and businesses to close, some workers who should have been counted in the employed population may not work at all for the entire week. Moreover, in areas of North Carolina affected by Hurricane &#34;Helene,&#34; many workers may still be on leave. This could lead to an increase in the unemployment rate in the October employment report.
At the same time, ahead of the expected landfall of Hurricane &#34;Milton,&#34; employers in the region have been closing their businesses. Theme parks such as Disney, Universal Studios, SeaWorld, Busch Gardens, and Legoland in Orlando have announced early closures on Wednesday.
JP Morgan analyst Abiel Reinhart estimates that the impact of Hurricane &#34;Helene&#34; on employment could range from &#34;a very small drag&#34; to losing over 100,000 jobs in October.
In addition to its impact on the labor market, the hurricane may also lead to rising commodity costs, including food and energy prices. Chevron announced on Monday that it has evacuated all personnel from the Blind Faith platform and closed the facility in preparation for &#34;Milton.&#34; Fruit prices may also be affected as Florida accounts for 17% of the national citrus production, with the central part of the state being the highest-producing region.
Reinhart estimates that the impact of &#34;Helene&#34; on state GDPs could be around 1%, with the four states most severely affected by the hurricane—Florida, Georgia, North Carolina, and South Carolina—accounting for nearly 13% of the U.S. GDP, resulting in an impact of about 0.13 percentage points on annualized GDP growth.
If &#34;Milton&#34; makes landfall in the Tampa metropolitan area with about 3.2 million residents, the losses and impact it causes could be greater than &#34;Helene.&#34;
AccuWeather founder and chairman Joel Myers expects that if &#34;Milton&#34; causes economic losses exceeding $200 billion, it could have a negative impact on the third-quarter GDP.
According to estimates from the U.S. Economic Advisory Committee, during the severe storm season in the U.S. in 2005, three hurricanes collectively caused a 0.7 percentage point decrease in the national GDP growth rate in the third quarter of that year and a 0.5 percentage point decrease in the fourth quarter.
However, analysts also point out that any impact of the storm on the economy will be temporary.
Ryan Sweet, chief U.S. economist at Oxford Economics, said that the hurricane will cause a slight drag on the economy at the beginning of this quarter, but output losses will be offset in the following months
Based on past experience, the rebuilding activities after Hurricane Katrina in 2005 led to a 0.5% increase in the national GDP of the United States in the first half of 2006. In addition, according to the analysis of the U.S. Bureau of Economic Analysis, the income and employment of those affected by Hurricane Katrina recovered quite quickly.
Sweet believes that any decline in employment statistics should be temporary and should not be a reason for the Federal Reserve to change its policy

The impact of the hurricane will be reflected as early as this Thursday in the initial jobless claims data to be released, and will also affect the non-farm data for October released on November 1st, just a few days before the US election on November 5th. In addition, the super hurricane will push up food and energy prices, and may have an impact on the GDP for the third quarter

- Two hurricanes may distort the U.S. labor market data for October, weakening consumption and raising prices, creating economic uncertainty ahead of the elections.  
- Hurricane "Milton," approaching Florida, follows Hurricane "Helen," which made landfall on September 26, and is expected to impact employment data and GDP.  
- The storms could lead to increased unemployment claims and higher costs for goods, particularly food and energy, with potential GDP impacts estimated at around 0.13 percentage points.

"Market Black Swan" before the U.S. election: Two hurricanes!