In October, job growth in the US saw a significant slowdown, affected by hurricanes and labor strikes that disrupted economic activity. Employers added just 12,000 jobs, a substantial drop from the 223,000 added in September, as reported by the Labor Department. Despite the hiring dip, the unemployment rate remained steady at 4.1%.
These figures, which provide insights into the strength of the US economy, are the final jobs data to be released before the presidential election on Tuesday. According to the Labor Department, healthcare and government sectors continued to expand, but manufacturing saw slower growth due to strike activity.
Since September 13, approximately 30,000 Boeing employees have been on strike, leading to significant disruptions in aircraft production. Workers at Textron, another aircraft manufacturer, have also been participating in strikes. Manufacturing jobs fell by 46,000 in October, largely driven by a 44,000-job decline in transportation equipment manufacturing due to the strikes.
Other major industries saw little to no job growth over the month. The 12,000 new jobs added were lower than anticipated, as economists had predicted an increase of 113,000. Striking workers were excluded from the jobs data, which contributed to the lower payroll numbers.
Brian Coulton, chief economist at Fitch Ratings, noted that while the 12,000 figure appears weak, it followed strong growth in September and was influenced by both strikes and hurricanes. Hurricane Helene hit the southeastern US in late September, followed by Hurricane Milton in Florida, causing 512,000 people to report being unable to work due to extreme weather.
Despite the slowdown, many expect the Federal Reserve to cut interest rates by 0.25% next week. Seema Shah, chief global strategist at Principal Asset Management, commented that the October jobs report could be set aside due to the impact of hurricanes, which may obscure the labor market’s strength and likely won’t alter the Fed’s policy path. Lindsay Rosner of Goldman Sachs Asset Management added, “Stormy numbers but sky clearing for November 25 bp [basis point] cut.”
The Labor Department noted that hurricanes likely affected October’s job numbers, as its surveys don’t fully isolate impacts from extreme weather. Over the past year, job growth has also decelerated, and unemployment has slightly edged up, though it remains at historically low levels. Average hourly earnings have increased by 4% over the past 12 months.
Last month, the Fed cut interest rates by 0.5%, aiming to prevent further softening in the labor market.
