US Job Growth Falls Short in October

Investing.com — The US economy added far fewer jobs than expected in October, affected by recent hurricanes and ongoing labor strikes.

Nonfarm payrolls rose by 12,000 during the month, a sharp decline from a revised 223,000 in September. Economists had anticipated 106,000 new jobs.

The Labor Department noted this was the first survey conducted after Hurricanes Helene and Milton struck the Southeast, causing significant damage. However, the extent of the storms' impact on the report remains unclear.

> "It is likely that payroll employment estimates in some industries were affected by the hurricanes; however, it is not possible to quantify the net effect on the over-the-month change in national employment, hours, or earnings estimates because the establishment survey is not designed to isolate effects from extreme weather events," stated the Labor Department.

In particular, employment in the manufacturing sector decreased by 46,000, with 44,000 linked to strike activities. Notably, over 30,000 Boeing workers on the US West Coast were on strike in October, although a new pay deal has sparked hopes for a resolution.

The overall unemployment rate remained steady at 4.1%, consistent with the previous month and economist forecasts. Average hourly earnings increased by 0.4% from a revised 0.3%.

Analysts at Vital Knowledge remarked, "The number should be taken with a giant grain of salt given myriad disruptions while other labor indicators point to relatively healthy employment conditions."

Separate economic data this week showed private payrolls were better than anticipated in October, with first-time unemployment claims dropping to a five-month low. A strong labor market and decreasing inflation have positioned consumer spending – a key driver of the US economy – favorably.

In response to these figures, markets largely anticipate the Fed will announce more interest rate cuts in its final two meetings of the year. The central bank had already reduced rates by 50 basis points in September, aiming to support the labor market as price pressures eased.

This data arrives just ahead of the Nov. 5 presidential election, with the economy top of mind for many voters. Preliminary data from the Commerce Department indicated the GDP for the world's largest economy rose by 2.8% in the July-September period, slightly below the expected 3.0%. The slowdown reflected declines in private inventory investment and residential fixed investments, though these were partially offset by increased exports and consumer spending, according to the Commerce Department.