US job growth slowed drastically in October, hit temporarily by hurricanes and labor strikes, in a final major economic snapshot at the end of a razor edge presidential election campaign where cost of living worries dominated voter concerns.
The world’s biggest economy added 12,000 jobs last month, far below expectations and down from a revised 223,000 in September, said the Department of Labor. In a more positive sign, the unemployment rate was unchanged at 4.1%.
The data on hiring and unemployment will be scrutinised by the teams of both presidential candidates Democrat Kamala Harris and Republican Donald Trump but employment numbers would have been higher if not for devastating hurricanes and worker strikes.
Unusually weak hiring numbers threaten to affect how Americans view the jobs market, some analysts warned.
The collective impact of Hurricanes Helene and Milton, alongside work stoppages by Boeing workers and others, could cut job growth by up to 100,000 positions, Council of Economic Advisers Chair Jared Bernstein said this week.
But the latest figure was still markedly below a market consensus estimate of 120,000.
This is the slowest rate of hiring since late 2020, and the lowest pace since President Joe Biden took office.
Average hourly earnings rose 0.4% from September, slightly above expectations.
Manufacturing drop
The Labor Department said its survey is “not designed to isolate effects from extreme weather events.”
But it added: “It is likely that payroll employment estimates in some industries were affected by the hurricanes.”
The report also said manufacturing employment fell by 46,000 in October, on a 44,000 drop in transportation equipment manufacturing that was largely due to strike activity.
Besides some 33,000 Boeing workers on strike, others doing so included 5,000 machinists at Textron Aviation and 3,400 hotel workers, noted EY senior economist Lydia Boussour.
In the Bureau of Labor Statistics survey tracking hiring, workers on strike for the entire reference pay period are not counted as employed, Boussour added.
Meanwhile, Hurricane Helene made landfall in late September meaning many people were probably unable to return to work when the survey was carried out.
Similarly, the survey week coincided with Hurricane Milton’s landfall.
“The October jobs report will need to be put into the broader context of a resilient but slowing labor market,” Boussour told AFP.
Despite slower hiring, economist Rubeela Farooqi of High Frequency Economics said the market’s resilience should still support household budgets.
Impact on voters?
A weaker headline hiring figure “will likely weigh on how people view economic conditions,” Farooqi said.
More broadly, “households are not feeling the benefits of a still strong labor market,” she added, pointing to cumulative inflation.
But economist Harry Holzer, a nonresident senior fellow at the Brookings Institution in Washington, expects the public will already expect to see lower hiring due to strikes and disasters.
A bigger problem would be a sharp slowdown after taking temporary factors into account.
“Rising incomes are keeping consumer wallets open. Any disruption of this would suggest the economy’s growth engine is starting to sputter,” Nationwide economist Oren Klachkin said.
Barring negative surprises, he expects the Federal Reserve to opt for a quarter percentage point interest rate cut at next week’s policy meeting.
Lingering effects
It is hard to predict the length of fallout from strikes and disasters.
For Aubrey Anderson, CEO of river recreation business Zen Tubing in North Carolina, Hurricane Helene’s devastation will cost at least a million dollars in losses.
“This is the first time that the water has damaged the infrastructure of the business,” said Anderson.
She expects her Asheville site to remain closed in 2025, meaning she will need just half the 100 employees she usually hires next spring and summer.
Helene was the second most-deadly hurricane to hit the continental United States in more than 50 years, after Katrina.
“We could not have expected something like this,” Anderson told AFP
