WASHINGTON (Reuters) – U.S. job growth slowed sharply in October amid disruptions from hurricanes and strikes by aerospace factory workers, but the unemployment rate held steady at 4.1%, offering assurance that the labor market remained on solid footing ahead of Tuesday’s election.
Nonfarm payrolls increased by 12,000 jobs last month after surging by a downwardly revised 223,000 in September, the Labor Department’s Bureau of Labor Statistics said on Friday.
Economists polled by Reuters had forecast payrolls rising 113,000. Estimates ranged from no jobs added to 200,000 positions created.
Hurricane Helene devastated the Southeast in late September and Hurricane Milton lashed Florida a week later. A total 41,400 new workers were strike, including machinists at Boeing (NYSE:BA) and Textron (NYSE:TXT), an aircraft company, when employers were surveyed for October’s employment report. The remaining 3,400 were workers at three hotel chains in California and Hawaii.
Workers who do not receive a paycheck during the survey period, which includes the 12th day of the month, are counted as unemployed in the survey of establishments from which the payrolls number is calculated.
The Labor Department’s closely watched employment report was the last major economic data before Americans head to the polls to choose Democratic Vice President Kamala Harris or Republican former President Donald Trump as the country’s next president.
Polls show the race is a toss-up. Americans have not warmed up to the economy’s strong performance, which has outshined its global peers, rankled by high prices for food and rents. Low layoffs have been the hallmark of the labor market’s strength.
The unemployment rate was unaffected by the distortions as the striking workers would be counted as employed in the household survey from which the jobless rate is derived.
Workers unable to work because of bad weather would be reported as employed, “with a job, but not at work” as per the BLS’ classification.
Economists expected the Federal Reserve to sort through the noise and cut interest rates by 25 basis points next Thursday. A rise in the unemployment rate to 4.3% in July from 3.8% in March was one of the catalysts for the U.S. central bank’s unusually large half-percentage-point interest rate cut in September, the first reduction in borrowing costs since 2020.
The Fed’s policy rate is now set in the 4.75%-5.00% range, having been hiked by 525 basis points in 2022 and 2023.
Though employers have pulled back on hiring, they are retaining their workers, underpinning wage gains and consumer spending. Average hourly earnings rose 0.4% after gaining 0.3% in September. Wages increased 4.0% in the 12 months through October after advancing 3.9% in September.
Source: Economy - investing.com
