The U.S. added just 12,000 jobs last month, a figure economists say was impacted by two hurricanes and a strike. Yet even with those caveats, the report pointed to a cooling labor market.
The latest payrolls figure marked the fewest monthly job gains since December 2020, during the depths of the Covid-19 pandemic, with the Bureau of Labor Statistics saying the U.S. effectively added no new net payrolls last month. Analysts had expected to see 110,000 jobs added in October.
The unemployment rate remained unchanged at 4.1%, still historically low. But the previous two months’ figures were revised lower by a combined 112,000. Monthly revisions result from additional reports from businesses and government agencies and from the recalculation of seasonal factors.
The BLS said “strike activity” was responsible for a decline of 46,000 in manufacturing employment, referring to a labor standoff at Boeing over which negotiations continue.
The agency also said irregularities with its survey process may also have affected the payrolls-added figure.
Yet, the unempl
What little hiring there was last month came mostly from health care, which added 52,000 jobs, and government roles, including at the state and local level, which rose 40,000.
The labor force also shrank by 852,000, which may reflect more people giving up on finding a job. Both the median and mean duration of employment increased. Compared with October last year, the number of people who have been unemployed for 15 weeks or more is up by about 20%, as the nation’s job market has steadily cooled.
The October payroll gains represent a sharp decrease from the revised 223,000 payrolls added in September, a figure that blew past expectations. The latest data was widely expected to reflect the impact of Hurricanes Helene and Milton — which together caused an estimated $50 billion in damage — as well as the ongoing strike at Boeing, which economists said could dent the monthly jobs report by about 100,000.
“Unfortunately, it won’t be easy to interpret the October jobs report,” Chris Waller, a member of the Fed’s Board of Governors, said earlier this month.
Other data shows the U.S. economy broadly remains in sound shape heading into Tuesday’s election. Inflation has effectively returned to the Federal Reserve’s 2% annual target. Economic output grew a sturdy 2.8% in the third quarter on the strength of consumer spending, and consumer confidence surged 11% in October, the biggest one-month jump since March 2021.
Yet many Americans continue to feel the financial strains. And although recent months’ payroll reports came in above expectations, the gains continue to be unevenly distributed.
Bureau of Labor Statistics data show four primary sectors — private education and health care; leisure and hospitality; construction; and government — have accounted for the vast majority of job growth in recent months.
“Some have spoken of a labor-market turnaround, a rebound, a reheating — but other labor market data don’t point in that direction,” said Julia Pollak, chief economist at ZipRecruiter. Even with the Fed cutting interest rates, “activity will likely pick up in one sector at a time,” she said.
Two key sectors that have historically signaled more sustainable economic growth — business and professional services, and manufacturing — have seen hiring slow, though each has a different source for that stagnation.
In manufacturing, a Biden administration push to boost blue-collar jobs through investments and tax incentives has been blunted by high interest rates, which make it harder for firms to invest in capital-intensive projects.
As interest rates decline, the sector could start to see some pick-up, Pollak said, though some economists say that the Fed’s rate cut hasn’t fully translated yet into lower borrowing rates for corporations. Key borrowing benchmarks like the 10-year Treasury note have so far remained stuck around similar levels seen over the past two and a half years.
Meanwhile, hiring has plunged in business and professional services, reducing many college-educated workers’ job prospects. A BLS report this week showed hiring rate for the sector — aside from the immediate pandemic impact — declining to a level last seen in October 2013, as the economy was emerging from the Great Recession. Pollak noted that many employers in that category have invested in labor-saving technologies, including artificial intelligence, which could reduce their need for a human workers.
Earlier in the week, the U.S. Department of Labor reported ongoing claims for unemployment assistance have yet to meaningfully come down, though at just over 1.8 million, they remain historically low.
Still, “continuing claims remain at levels above the same time last year and a low hiring environment suggests claims could stay elevated,” Citi analysts wrote in a note to clients Thursday. “Without an increase in hiring, even moderate levels of job losses will likely cause the unemployment rate to pick up.”
The post How two major hurricanes, labor strike might affect the numbers appeared first on NBC News.
