According to data from the U.S. Bureau of Labor Statistics, employers added only 12,000 jobs last month, significantly below economists’ predictions of 90,000. The unemployment rate remained steady at 4.1%, consistent with the previous month and reflecting historically low levels. While the numbers may suggest a cooling labor market, experts urge caution in interpreting these figures due to one-off disruptions.
Martha Gimbel, Executive Director of the Budget Lab at Yale University and former Director of Economic Research at Indeed, explained that workers who were unable to be counted due to storm-related disruptions might not have been reflected in the survey results. “Workers affected by the storms and businesses dealing with recovery efforts may have been too busy to respond,” she noted.
Storms, particularly Hurricane Milton, which struck Florida as a Category 3 storm on October 9, left millions without power and disrupted gas supplies statewide. Additionally, Hurricane Helen hit in late September, exacerbating recovery efforts that have persisted for weeks.
The report also reflects the impact of a labor strike, as approximately 33,000 Boeing employees left their jobs in mid-September, a loss that began to show in the October figures. Bank of America Global Research has estimated that a combination of these storms and work stoppages has likely caused a decline of about 50,000 jobs in recruitment levels that otherwise would have been added.
In a note to clients, the bank indicated, “Milton likely affected wages across the board, particularly in leisure and hospitality.” They also suggested that Hurricane Helen might have had a minor impact as well.
Despite the broader economic challenges this year, the job market has shown remarkable resilience. While job growth has slowed, unemployment rates have increased only marginally, remaining close to a 50-year low.
The latest hiring data arrives at a time when other economic indicators suggest steady growth. The U.S. Bureau of Economic Analysis reported that GDP grew at an annual rate of 2.8% for the three months ending in September, driven by robust consumer spending, although it fell slightly short of economists’ expectations.
Additionally, the Federal Reserve’s preferred inflation gauge showed a 2.1% increase in prices over the year ending in September. While this marks a dramatic slowdown from nearly 9% inflation in 2022, it still exceeds the Fed’s target of 2%.
The timing of the jobs report is particularly significant, as it arrives just four days before the election on November 7, and it represents the last major piece of economic data before the Federal Reserve announces its next interest rate decision. According to the CME FedWatch Tool, there are expectations for a quarter-point rate cut by the Fed, reflecting the ongoing balancing act of stimulating economic growth while managing inflation.
As the nation navigates these economic uncertainties, the October jobs report underscores the complexities of the labor market in the face of external challenges, signaling a need for both caution and optimism as policymakers and voters prepare for upcoming decisions.
