Employers added just 12,000 jobs in October — far slower growth than expected — for the lowest job total since December 2020 as devastating hurricanes and a major strike across US ports crushed jobs, according to government data.
Economists surveyed by Dow Jones had expected payrolls to expand by 100,000, which still would have been a huge drop from September’s revised 223,000.
The employment rate remained unchanged at 4.1% and the number of unemployed people was little changed at 7 million, according to the US Bureau of Labor Statistics.
These numbers are up compared to this time last year, when the jobless rate was 3.8% and the number of unemployed people was 6.4 million.
As inflation has shown signs of cooling, the Federal Reserve has turned its attention to jobs data — hopeful for a low unemployment rate — ahead of its meeting on Nov. 6 – 7 as it weighs whether to issue another outsize interest rate cut.
The Federal Reserve slashed interest rates in September by a half-point cut on easing inflation.
“It is likely that payroll employment estimates in some industries were affected by the hurricanes,” the Labor Department said.
Goldman Sachs estimated that Hurricane Helene, which made landfall on Florida’s Gulf Coast on Sep. 26 and wreaked havoc across the Southeastern states, erased as much as 50,000 off the payrolls count.
Jobs in healthcare and government continued to trend upwards while temporary help services lost jobs and the manufacturing sector was hit hard by a seven-week long strike by Boeing employees, which is still ongoing over the union’s pay raise demands.
The Boeing strike could lower the total payrolls by 41,000 people, Goldman said.
The number of permanently unemployed people ticked up to 1.8 million in October.
The number of people jobless for 27 weeks or more was little changed at 1.6 million, though this measure is up from 1.3 million this time last year.
Average hourly earnings for employees on nonfarm payrolls grew 0.4% to $35.46 an hour. Hourly earnings have risen 4% over the past 12 months.
The change in total nonfarm employment for September was revised from 254,000 new jobs to 223,000.
The jobs report, which showed growth far below already poor expectations, could discount the Fed’s success with rate cuts and dispel the economy’s so-called soft landing, which is a slowdown in growth without enflaming a recession.
Odds of a less aggressive quarter-point interest rate cut at the central bank’s November meeting stand at nearly 99%, as per the CME Group’s FedWatch Tool.
Meanwhile, consumer sentiment rose for the third month in a row to its highest reading since April, according to the University of Michigan’s Survey of Consumers.
Modest improvements in buying consumer goods thanks to easing interest rates improved consumer outlook, the survey said.