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US job growth slows to lowest rate since 2020
The U.S. economy added just 12,000 jobs in October, well below market expectations of 113,000 and following downward revisions to previous months, as hurricanes and strike actions weighed on hiring across key sectors
U.S. added 12,000 jobs in October, missing the 113,000 forecast
Unemployment rate held steady at 4.1%
Hourly earnings remained firm despite weak job growth
U.S. hiring in October advanced at the slowest pace since 2020, with nonfarm payrolls increasing by just 12,000, following downward revisions for the prior two months. The unemployment rate remained steady at 4.1%, while hourly earnings showed resilience. The Bureau of Labor Statistics (BLS) indicated that hurricanes likely impacted payrolls in certain sectors, though it stated that quantifying the net effect on national employment, hours, or earnings estimates was not feasible. The BLS further noted that the collection rate for the business survey informing these statistics was “well below average.”
Job gains were observed in health care and government, but employment levels in other industries were largely stagnant or negative. Notable declines occurred in retail trade, transportation and warehousing, and leisure and hospitality, which appeared to reflect weather-related disruptions. Manufacturing payrolls experienced a significant decline, falling by 46,000—marking the largest drop since April 2020—largely attributed to strike activity involving 33,000 workers at Boeing.
The subpar payroll figures for October, falling well below consensus expectations yet aligning closely with forecasts, likely surprised some Federal Reserve officials. While much of the weakness in the establishment survey is linked to disruptions from Hurricanes Helene and Milton, other factors contributed to the disappointing data, including strikes at Boeing, layoffs in the automotive sector, and weakness in professional and business services hiring. It could be said, after excluding transitory factors and adjusting for data overstatements, underlying job growth is likely below the level necessary to stabilize the unemployment rate, which is expected to begin rising in the coming months. Consequently, the October jobs report is anticipated to keep the Federal Open Market Committee (FOMC) on track for a 25-basis-point rate cut at its upcoming meeting on November 6-7. But it will open the door to discuss more cuts.
