Economy

The October jobs report marked the weakest pace of job creation since 2020.
Employment growth across industries showed a mixed U.S. economy.
Growth in the period was led by health care and social assistance as well as the government.

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The jobs report for October came in much weaker than expected, and employment growth across different industries painted a mixed picture for the U.S. economy.
The biggest contribution last month came from health care and social assistance, with 51,300 new positions added in that area, per data from the Bureau of Labor Statistics. If private education is included with the health-care group, like some economists do, the category would have shown even more growth at 57,000.

Government had the second-highest gains in the period, seeing jobs surge by 40,000. That is close to the group’s average monthly gain of roughly 43,000 in the prior 12 months.
Meanwhile, wholesale trade and construction also saw some gains, recording growth of 10,400 and 8,000, respectively.

Other industries recorded massive losses, however. Professional and business services led the way, posting declines of 47,000. Manufacturing was right behind that category, declining by 46,000.
Notably, the Bureau of Labor Statistics cited strike activity as a driver of the declines in manufacturing. Boeing’s machinist strike has been going on for more than seven weeks. On Thursday, however, Boeing and the union reached a sweetened contract offer that will be voted on Monday.
Julia Pollak, ZipRecruiter’s chief economist, said that while this report “largely” reflects the effects of the strike and storms such as Hurricanes Helene and Milton, it is not necessarily a “blip.”

“It is quite consistent with the big picture and the ongoing labor market slowdown that we’ve seen over the past two years,” she told CNBC. “The main issue in the labor market is still restricted monetary policy, not strikes and storms, and that actually is sort of a consistent narrative that we’ve seen.”
Leisure and hospitality, the leader of employment growth in the September report, and retail trade were two other key areas marred by declines. The former shrank by 4,000 jobs, while the latter shrank even more at 6,400.

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The unemployment rate for white workers inched higher to 3.8% in October from 3.6% in September.
This bucked the overall unemployment rate, which held steady at 4.1% last month.
Jobless rates were also unchanged for Black and Hispanic Americans, while unemployment crept lower for Asian workers in October.

A jobseeker holds flyers during the New York Public Library’s annual Bronx Job Fair & Expo at the the Bronx Library Center in the Bronx borough of New York, US, on Friday, Sept. 6, 2024. 
Yuki Iwamura | Bloomberg | Getty Images

The unemployment rate for white Americans inched higher in October, according to data released Friday by the Department of Labor.
In October, white Americans saw their jobless rate rise to 3.8% from 3.6% in the month prior. This trend bucked the overall unemployment rate for the country, which held steady at 4.1% in October from September, as well as for the other demographic groups.

The jobless rates for Black and Hispanic workers were unchanged last month at 5.7% and 5.1%, respectively. Asian Americans saw their unemployment rate creep lower to 3.9% from 4.1%.
On the other hand, the jobless rates for both white men and women edged higher in October. For the men, it increased to 3.5% from 3.4%. For women, it rose to 3.3% from 3.1%.

While Hispanic women saw their jobless rate climb to 5.2% from 4.8%, unemployment rates for their male counterparts slid to 4.0% from 4.1%. The unemployment rate also ticked lower for Black women to 4.9% from 5.3%, while it climbed to 5.7% from 5.1% for Black men.
To Heidi Shierholz, president of the Economic Policy Institute, this jump indicates the distortion and volatility in month-to-month data, especially considering that the jobless rate for Black men dropped to 5.1% in September from 5.9% in August.
“I think that the big increase that we saw in Black male unemployment in October was really just renormalizing after the big, unusual drop in September,” she told CNBC.

Shierholz added that October’s unemployment numbers were also unusually affected by the hurricanes and labor strikes, making it even more difficult to compare these data points.
“You never want to focus on one month’s data, and that is more true than ever right now because this month’s data was so distorted by these unusual temporary factors,” she said.
In October, the overall labor force participation rate — the percentage of the population either employed or actively seeking work — ticked down to 62.6% in October from 62.7% in September.

Among white workers, the labor force participation rate also inched lower to 62.2% in October from 62.4% in the prior month, while it declined to 66.9% from 67.4% for Hispanic workers. Within Asian workers, the participation advanced to 65.5% in October from 65.3% in September, while it held steady for Black Americans at 62.9%.
— CNBC’s Gabriel Cortes contributed to this report. More

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Nonfarm payrolls increased by 12,000 jobs last month after surging by a downwardly revised 223,000 in September, the Labor Department said on Friday. Economists polled by Reuters had forecast payrolls rising 113,000. MARKET REACTION:STOCKS: S&P 500 E-minis added to gains and were up 0.43%BONDS: The yield on benchmark U.S. 10-year notesfell to 4.2605%, the two-year note yield fell to4.1124%FOREX: The dollar index turned 0.019% lower COMMENTS: MATT BUSH, US ECONOMIST, GUGGENHEIM INVESTMENTS, NEW YORK”(The Fed) were pretty locked in, no matter what this report was going to say, because of just the uncertainty around hurricane impacts. The concern was, they may try to reduce expectations for cuts beyond the November meeting, maybe walk back expectations for December or walk back the number of cuts they were kind of signaling for 2025. This report was weak enough where they’ll just keep all options open and firmly leave the door open to another cut in December and the meetings beyond that.”BEN VASKE, SENIOR INVESTMENT STRATEGIST, ORION PORTFOLIO SOLUTIONS, OMAHA, NEBRASKA”October job growth was sharply lower relative to September and consensus expectations. However, lower growth was expected to a degree given election uncertainty, recent labor strikes, and hurricanes impacting the southeast US – the labor market has already begun recovery from the two latter effects. Despite lower growth, the unemployment rate remained steady, and early reactions seem to not be impacting expectations that the Fed will proceed with another 25-basis point rate cut in November.” CHARLIE RIPLEY, SENIOR INVESTMENT STRATEGIST, ALLIANZ INVESTMENT MANAGEMENT, MINNEAPOLIS “From an investment standpoint, this doesn’t really change much in terms of what’s expected from a Fed standpoint or thoughts around the slowing economy. We have to look past this month’s data and see what comes out in the following months when there’s much less noise.””There’s definitely some mixed signals – the weaker payroll number versus an unemployment rate that was largely the same, and then a small uptick on the monthly wage side. When you round it all together it’s a pretty mixed report.”PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK“Obviously, this is a big miss and if you take away the fact that some of it could be attributed to hurricanes in Florida and the Boeing (NYSE:BA) strike, even with even factoring in those numbers, it’s still a big miss and it points to the possibility the labor market is weakening to the point where the Fed may have to consider being more aggressive.”“What is worrying, is hourly wages rose again by 0.4% and the participation rate is dropping.”“This is likely to rekindle the possibility that the Fed will cut rates twice before the end of the year. As of yesterday, I was expecting the Fed will probably skip a cut at its next meeting, but I think we can count on a 25 bp cut in November and another in December.“HELEN GIVEN, ASSOCIATE DIRECTOR OF TRADING, MONEX USA, WASHINGTON DC”The headline figure has been expected for quite some time to be low, though perhaps not this low, but it looks like right now that traders are treating the entire data dump this morning with a grain of salt.””The point of concern, though, could lie with the two-month net payroll revision, which is quite negative and calls into question September’s blowout headline number. The unemployment rate didn’t change, though, and average hourly earnings stayed steady.””FX markets are taking this pretty much in stride since so many of the external factors influencing the numbers were discussed ahead of time.”LINDSAY ROSNER, HEAD OF MULTI SECTOR FIXED INCOME INVESTING, GOLDMAN SACHS ASSET MANAGEMENT (via email)“Strikes and storms weighed on this month’s jobs data with jobs growth surprising to the downside and the unemployment rate staying put. While the Fed will likely attribute some of the weakness in today’s data to one-off factors, the softness in today’s data argues for the Fed to continue its easing cycle at next week’s meeting. Stormy numbers but sky clearing for November 25 bp cut.”WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY“It’s definitely a surprising number on the downside, but I think given all the noise that was expected in this number between the hurricane and the revisions and other stuff. We do need to take it with a grain of salt, just. Obviously, the market is still in the sort of bad-news-is-good-news scenario because a weak number like this increases the odds of Fed cuts. So the recent push backs that the market was getting on trying to push out the rate cuts that obviously is taking a little bit of a backseat. The initial knee-jerk reaction is the bad news is good news and this is good for risk assets as well as bonds. In the long run, it might not be as impactful of a number because of the noise.”BRYON ANDERSON, HEAD OF FIXED INCOME, LAFFER TENGLER INVESTMENTS, SCOTTSDALE, ARIZONA”As we thought this jobs report was going to have a lot of noise around any signal. With two hurricanes and a Boeing strike the likelihood of this report being clean was going to be hard. The unemployment rate not increasing again is a good sign for the economy and breaks the Sahm rule everyone was panicking about a couple months ago. Hourly earnings increases are still increasing at a healthy pace so we still have confidence in the economy. The nonfarm payrolls may not be great on its face, but this recent drop should be a temporary miss as rebuilding and activity picks up with after the Hurricanes and likelihood of the Boeing strike ending.”BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN”The employment situation is opaque. The hurricane effects are hard to quantify, so most people will see these numbers and just ignore them. There were some significant revisions to previous months’ data, which should not be glossed over. The response rates are low and the error bands are large on these reports. The Fed will likely ignore this release and hopefully just stay the course they laid out in their last summary of economic projections, which would mean a 25 basis point cut in November and another in December.”ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT    “I don’t this it’s a compromise on the economy and we were expecting a weaker number, but not this weak. It’s again a combination of a slowing economy and the hurricanes and strikes. So, I’m not overly worried about what it’s going to mean for the equity market overall…We’re on track for another 25-basis points rate cut.”BRYCE DOTY, SENIOR PORTFOLIO MANAGER, SIT INVESTMENT ADVISORS, MINNEAPOLIS    “This report dampens the enthusiasm from last month’s report. However, we are still expecting only a 25 bps cut by the Fed next week as the economy is still unlikely to go into a recession. The yield curve should steepen on this news, led by shorter maturity treasury yields coming back down.” More

Nonfarm payrolls increased by 12,000 for the month, down sharply from September and below the Dow Jones estimate for 100,000.
The unemployment rate held at 4.1%, in line with expectations.
The BLS noted that the Boeing strike likely subtracted 44,000 jobs in the manufacturing sector, while hurricanes also likely held back the total.
Revisions lowered previously reported job creation totals by 112,000 for August and September combined.

Job creation in October slowed to its weakest pace since late 2020 as the impacts of storms in the Southeast and a significant labor impasse dented the employment picture.
Nonfarm payrolls increased by 12,000 for the month, down sharply from September and below the Dow Jones estimate for 100,000, the Bureau of Labor Statistics reported Friday. In what had already been expected to be a downbeat report, October posted the smallest gain since December 2020.

The unemployment rate, however, held at 4.1%, in line with expectations. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons also was unchanged at 7.7%.
In the report narrative, the BLS noted that the Boeing strike likely subtracted 44,000 jobs in the manufacturing sector, which lost 46,000 positions overall.

Along with that, the report noted the impact of hurricanes Helene and Milton but said “it is not possible to quantify the net effect” of the storms on the jobs total.
Elsewhere, the bureau said average hourly earnings increased 0.4% for the month, slightly higher than the estimate, though the 4% 12-month gain was in line. The average work week held steady at 34.3 hours.
Markets, though, largely ignored the bad news, with stock market futures poised for a strong open on Wall Street while Treasury yields plunged. The meager jobs numbers along with wages about in line with expectations help cement another interest rate cut from the Federal Reserve next week.

“At first glance, October’s jobs report paints a picture of growing fragility in the U.S. labor market, but under the surface is a muddy report roiled by climate and labor disruptions,” said Cory Stahle, an economist at the Indeed Hiring Lab. “While the impacts of these events are real and should not be ignored, they are likely temporary and not a signal of a collapsing job market.”

The release comes just days ahead of the presidential election in which Democrat Kamala Harris and Republican Donald Trump are in what most polls show to be a deadlocked race. With the economy at the forefront of the battle, the light jobs number “casts a murky shadow heading into next week,” said Lisa Sturtevant, chief economist at Bright MLS.
The weak October report also included substantial downward revisions from previous months. August was cut to just a gain of 78,000 while September’s initial estimate came down to 223,000. Together, the net revisions lowered previously reported job creation totals by 112,000.

Health care and government again led job creation, respectively adding 52,000 and 40,000 positions. Several sectors, though, saw job losses.
In addition to the expected pullback in manufacturing, temporary help services saw a drop of 49,000. The category is sometimes seen as a proxy for underlying job strength and has seen a decline of 577,000 since March 2022, the BLS said.
Another leading sector, leisure and hospitality, saw a drop of 4,000, while retail trade and transportation and warehousing also reported modest declines.
In the household survey, which is used to calculate the unemployment rate, the hiring numbers were even weaker.
That showed 368,000 fewer people reported holding jobs and the labor force contracting by 220,000. Full-time employment declined by 164,000, while part-timers fell by 227,000.
The report covers a month in which hurricanes Helene and Milton slammed the Southeast – Florida and North Carolina in particular – while the Boeing strike also hit what had been a vibrant though slowing labor market. Recent developments indicate that the Boeing impasse could be near an end.
Prior to the release, job creation had averaged close to 200,000 a month during 2024, about 60,000 below the pace for the same period a year ago through still indicative of solid pace of hiring.
Some cracks in recent months have raised concerns at the Federal Reserve that while the year-over-year pace of inflation is slowing, elevated interest rate could impact the labor market and threaten the ongoing economic expansion.
As a result, policymakers in September took a step unprecedented for a growing economy and lowered their benchmark short-term interest rate by half a percentage point, double the customary quarter-point increments in which the Fed usually likes to move.
Financial markets are pricing in a strong likelihood that the central bank cuts by a quarter point at each of its two remaining meetings this year. The rate-setting Federal Open Market Committee will announce its decision next Thursday. More

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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. More

LONDON (Reuters) -Short-term British government borrowing costs headed for their biggest weekly jump in over a year on Friday, while the pound faced its longest stretch of weekly losses in six years as Labour’s tax-and-spend budget raised inflation expectations.Two-year gilt yields, which led the selloff as investors pared back rate cut expectations, have risen 26 basis points on the week, set for their biggest weekly increase since June 2023.Benchmark 10-year yields were up 21 bps, the biggest weekly move this year, having touched their highest in a year on Thursday at 4.526%. Yields however dipped on Friday and sterling edged higher, suggesting investor sentiment was calming. While the surge in government borrowing costs and the drop in the pound are sizable, the speed and scale are far short of the crisis that rocked markets in September 2022 following then-Prime Minister Liz Truss’s budget of billions in unfunded tax cuts.”2022 was something really quite off the scale. But that doesn’t mean that what we saw this week wasn’t important,” City Index market strategist Fiona Cincotta said.Yields have jumped as markets digest the government’s plans, which will add nearly 70 billion pounds a year to the public spending bill, according to Britain’s fiscal watchdog, with just over half covered by higher taxes and the rest by increased borrowing.The UK’s Office for Budget Responsibility now expects inflation will average 2.6% next year, compared with a previous 1.5% forecast.Traders expect less than 90 bps of rate cuts by the end of next year, having priced in well over a percentage point prior to the budget.They still expect a rate cut at the Bank of England’s meeting next Thursday but have reduced the chance of a December cut to less than 50%. Some investors said the moves may be exacerbated by positioning shifts, with many investors having favoured gilts before the budget. BNP Paribas (OTC:BNPQY) Asset Management told Reuters it had closed its overweight position in gilts, while Artemis is selling 10-year gilts following the budget.BUYING OPPORTUNITYInvestors including Lazard (NYSE:LAZ) Asset Management and AXA Investment Managers reckon gilts look attractive with higher yields. “It doesn’t strike us as an irresponsible budget,” said AXA’s head of total return and fixed income Nick Hayes.”When I speak to the investment banks, they talk about decent buyers of gilts across the curve… you’re not seeing any panic selling.”Rabobank said on Friday the market reaction had been “overdone,” with the OBR expecting Britain’s deficit, based on current spending and revenue, to turn to a surplus in four years.Sterling edged up 0.3% against the euro on Friday, though it was still headed for its biggest one-week slide against the single European currency in more than a year, down by 1%. Against the dollar, it was steady on the day at $1.291, but down 0.4% on the week, set for its fifth weekly decline – the longest such stretch since late 2018.The currency falling as markets reduce rate cut bets shows the budget is not being seen as good for growth, City Index’s Cincotta said.The OBR revised up growth projections modestly for this year and next, but lowered them for 2026-2027.Investors are sitting on one of the largest bullish positions in sterling on record., worth $6.05 billion and the biggest bet against the dollar among the major currencies, according to the most recent weekly data from the U.S. markets regulator, making it vulnerable to further drops. The derivatives market shows traders are more willing to pay more for options to sell sterling rather than buy it than at any time in the last 16 months.”We like short GBP even more given its limited move so far,” Neil Mehta, portfolio manager at BlueBay Asset Management, said.For the time being, UK bonds were likely to remain jittery, with the U.S. presidential election taking place next week. “We anticipate high volatility in global rates markets next week, which could be even more pronounced in gilts,” Lazard Asset Management’s co-head of global fixed income Michael Weidner said. More