Job creation slowed in October to its lowest level since late 2020 as the impact of storms in the Southeast and a severe labor gridlock weakened job prospects.
The U.S. Bureau of Labor Statistics reported on Friday that nonfarm payroll employment increased by 12,000 this month, a sharp decrease from September and below the Dow Jones estimate of 100,000. This was the smallest increase since December 2020.
However, the unemployment rate remained at 4.1%, in line with expectations. The broader unemployment rate measure, which includes discouraged workers and those working part-time for economic reasons, also remained unchanged at 7.7%.
In the report’s narrative, the Bureau of Labor Statistics noted that the Boeing strike could lead to a loss of 44,000 jobs in the manufacturing industry, with a total manufacturing loss of 46,000 jobs.
Among other things, the report noted the impact of hurricanes Helen and Milton, but said it was “impossible to quantify the net impact of the storms on total employment.”
In addition, the bureau said average hourly earnings grew 0.4% this month, slightly higher than expected, but the 12-month growth of 4% was in line with expectations. The average working hours per week remained stable at 34.3 hours.
The news comes just days before the presidential election, with most polls showing the race between Democrat Kamala Harris and Republican Donald Trump deadlocked. Lisa Sturtevant, chief economist at Bright MLS, said the thin jobs data “casts a dark shadow over next week” as the economy is at the forefront of the battle.
The weak October report also included sharp downward revisions from previous months. August’s increase was revised down to just 78,000, while the initial estimate for September was revised down to 223,000. The net revision total reduced the previously reported job creation total by 112,000.
The health care and government sectors once again led job creation, adding 52,000 and 40,000 positions respectively. However, job losses occurred in several industries.
In addition to the expected manufacturing contraction, temporary help services workers also fell by 49,000. The U.S. Bureau of Labor Statistics said this category, sometimes considered a proxy for underlying work intensity, has declined by 577,000 workers since March 2022.
Leisure and hospitality, another leading industry, fell by 4,000, while retail trade, transport and warehousing also saw small declines.
This is breaking news. Please check back for updates.
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