U.S. Nonfarm Payrolls Impacted by Strikes
By Lucia Mutikani
WASHINGTON (Reuters) – U.S. nonfarm payrolls in October may decrease by as many as 41,000 jobs due to strikes in the aerospace manufacturing sector and at three hotel chains, as reported by government data on Friday.
The Labor Department's monthly strike report indicates that 33,000 Boeing employees were on strike at the company's plants in California, Oregon, and Washington during the October payrolls survey.
Additionally, 5,000 members of the International Association of Machinists and Aerospace Workers, representing Boeing factory workers, were striking at Textron in Kansas.
The report also highlighted that 3,400 workers walked off their jobs at Hilton, Hyatt, and Marriott hotels and motels in California and Hawaii. These striking workers are classified as unemployed since they did not receive pay during the government's survey period.
The impact on payrolls from the Boeing strikes could increase, with reports of furloughs or layoffs among some of the company’s suppliers.
The labor market is also anticipated to be negatively affected by Hurricanes Helene and Milton, which are estimated to have eliminated up to 40,000 jobs from payrolls in October.
Preliminary data from a Reuters survey of economists predicts an increase of 125,000 jobs in nonfarm payrolls this month, following a rise of 254,000 in September. The unemployment rate is expected to remain stable at 4.1%. The employment report for October will be released on Nov. 1, shortly ahead of the U.S. elections.
Economists suggest that the Federal Reserve will likely overlook October's employment report during their meetings on Nov. 6-7.
The increase in the unemployment rate from 3.4% in April 2023 to 4.3% in July triggered the central bank's significant 50-basis-point rate cut last month, marking the first decrease in borrowing costs since 2020, bringing the Fed's policy rate to a range of 4.75%-5.00%. The Fed had raised rates by 525 basis points in 2022 and 2023 to combat inflation, with expectations of a 25-basis-point cut next month.
The ongoing Boeing strike has hindered production of its popular 737 MAX and 767 and 777 models, adversely affecting industrial production in September. Workers rejected a contract offer on Wednesday.
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