close
close

Association-anemone

Bite-sized brilliance in every update

US employment slowest since Biden took office, strikes, hurricanes
asane

US employment slowest since Biden took office, strikes, hurricanes

Elizabeth Brunner (L) and Hope Johnson (R), recruiters for the city of Pompano Beach, talk to job seekers during the JobNewsUSA.com South Florida Fair held at Amerant Bank Arena on June 26, 2024, in Sunrise, Florida. Photo: AFP/FILE

“>


employment in the US

Elizabeth Brunner (L) and Hope Johnson (R), recruiters for the city of Pompano Beach, talk to job seekers during the JobNewsUSA.com South Florida Fair held at Amerant Bank Arena on June 26, 2024, in Sunrise, Florida. Photo: AFP/FILE

U.S. job growth slowed sharply in October, temporarily hit by hurricanes and labor strikes, in the latest major economic snapshot in a high-stakes presidential campaign in which concerns about the cost of living dominated voters’ concerns .

The world’s largest economy added just 12,000 jobs last month, well below expectations and down from a revised 223,000 in September, the Labor Department said. The unemployment rate was unchanged at 4.1 percent.

Employment and unemployment data will be analyzed by the teams of both presidential candidates — Democrat Kamala Harris and Republican Donald Trump — but the hiring numbers would have been higher if not for the devastating hurricanes and labor strikes.

Unusually weak employment numbers threaten to affect how Americans view the labor market, some analysts have warned.

The collective impact of hurricanes Helene and Milton, along with work stoppages by Boeing workers and others, could reduce job growth by as much as 100,000 jobs, Jared Bernstein, chairman of the Council of Economic Advisers, previously said.

But the latest figure was still significantly below the market consensus estimate of 120,000.

This is the lowest employment rate since the end of 2020 and since President Joe Biden took office.

“Job growth is expected to return in November as our hurricane recovery and rebuilding efforts continue,” Biden said Friday, also outlining a new contract proposal for striking Boeing workers.

But Trump called the report “a huge embarrassment,” blaming Harris for the decline in manufacturing jobs, even though that was hit hard by the strike.

Average hourly earnings rose 0.4 percent from September, slightly ahead of expectations.

The Labor Department said its survey “is not designed to isolate the effects of extreme weather events.”

But he added, “Wage employment estimates in some industries are likely to have been affected by the hurricanes.”

The report also said manufacturing employment fell by 46,000, following a 44,000 drop in transportation equipment production, which was largely due to strike activity.

In addition to the roughly 33,000 Boeing workers on strike, others who did so included 5,000 machinists at Textron Aviation and 3,400 hotel workers, EY senior economist Lydia Boussour noted.

In the employment tracking survey, workers on strike for the entire reference pay period are not considered employed, Boussour added.

Meanwhile, Hurricane Helene made landfall in late September, meaning some people may not have been able to return to work when the survey was conducted.

Similarly, the week of the survey coincided with the landfall of Hurricane Milton.

Economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics suggested treating the employment component of the report “as an unreliable indicator” of the true state of the market.

A weaker employment figure “will probably influence how people view economic conditions,” Farooqi told AFP.

More broadly, “households are not feeling the benefits of a still strong labor market,” she added, pointing to headline inflation.

But economist Harry Holzer, a non-resident senior fellow at the Brookings Institution in Washington, said the public was already expecting lower numbers this time around.

A bigger problem would be a sudden slowdown after accounting for temporary factors.

“Rising incomes keep consumers’ wallets open. Any disruption to that would suggest the economy’s growth engine is starting to falter,” Nationwide economist Oren Klachkin said.

“The job market is cooling, but I wouldn’t call it cold,” he said.

Strikes and hurricanes only partially explain the weakness, warned economist Samuel Tombs of Pantheon Macroeconomics.

Payrolls, excluding temporary help or leisure and hospitality — usually hit hard by hurricanes — along with transportation equipment manufacturing, averaged just half the growth over the past 12 months, he said.

There was no impact on the unemployment rate because those on strike or unable to work because of the weather are still counted as employed, he said.

But the survey tracking that showed a drop of 368,000 jobs, added Mortgage Bankers Association chief economist Mike Fratantoni.

While there are no large layoffs, there has been a continued reduction in job openings, he added.

Analysts expect the Fed to cut interest rates by a quarter of a percentage point next week, rather than no rate cut at all.

“Fed officials will likely look at the raucous wage numbers,” Boussour said.