The US Department of Labor released a report on Friday (November 1) showing that due to hurricanes and workers’ strikes, employment growth in the US slowed significantly in October with a modest increase of 12,000 non-farm jobs, while the unemployment rate remained steady at 4.1%.
The Bureau of Labor Statistics of the Department of Labor also revised downward the employment data for August and September while announcing the October employment figures. The job gains for August were revised down from 159,000 to 78,000 (a decrease of 81,000), and September’s figures were revised down from 254,000 to 223,000 (a decrease of 31,000).
In October, the addition of new jobs was only 12,000, significantly lower compared to September and below the Dow Jones’ estimate of 100,000. This marks the smallest increase since December 2020. However, the unemployment rate stayed at 4.1%, in line with expectations.
In late September, Hurricane Helene hit the southeastern US, followed by Hurricane Milton in Florida a week later. Employment in the manufacturing sector declined due to strike activities.
In terms of specific industries, the healthcare sector led the employment growth with an addition of 52,000 non-farm jobs in October, while the government sector added 40,000 jobs.
Temporary support services cut 49,000 job positions in October, manufacturing saw a decrease of 46,000 jobs, and the leisure and hospitality industry had 4,000 fewer job positions.
The average hourly wage, a gauge of inflation, increased by 0.4% in October to $35.46, slightly above expectations, with a 4% year-on-year increase as anticipated.
According to Reuters, Ben Vaske, a senior investment strategist at Orion Portfolio Solutions, expressed that the October job growth was significantly lower than September and below expectations. However, considering the uncertainty of the upcoming election, recent strikes, and the impacts of hurricanes in the southeastern US, the slower growth was somewhat expected.
“Despite the decline in job growth, the stable unemployment rate appears to not have affected the Federal Reserve’s anticipated 25-basis-point rate cut in November,” said Vaske.
Charlie Ripley, a senior investment strategist at Allianz Investment Management, stated, “There are definitely mixed signals—a weaker job report, an essentially unchanged unemployment rate, and a slight increase in monthly wages. Overall, it is a report of mixed feelings.”