U.S. Added 12,000 Jobs In October—Final Labor Market Datapoint Before Election Far Worse Than Expected

Posted by Admin November 1, 2024 Jobs

Topline

The U.S. labor market grew by much less than expected in October, according to a government report released Friday morning, providing the final major update on the state of the American economy ahead of Election Day.

Hiring signs outside a McDonald’s restaurant New York last month.

Key Facts

The U.S. added 12,000 jobs last month, according to the Bureau of Labor Statistics’ estimate of the number of nonfarm payroll additions.

That falls far short of median economist estimates of 110,000, according to Dow Jones data, while it’s well below September’s initially reported 254,000 job additions.

October was the weakest month for job growth since Dec. 2020.

The unemployment rate came in at 4.1%, matching economists forecasts of a 4.1% jobless rate, where it stood in September.

The government revised August and September nonfarm payroll estimates down by 112,000, indicating weaker labor market expansion at the end of summer than previously reported.

Tangent

Bank of America economists Aditya Bhave and Shruti Mishra identified several events which may have temporarily weighed down the size of the American labor force last month, including work stoppages stemming from severe weather events like Hurricane Milton and worker strikes, such as the Boeing factory worker walkout. Those distortions caused at least a 50,000-job reduction in payrolls last month, according to Bank of America, which also identified a 25,000-job bump in government jobs due to election workers. In the Friday release, the government said it’s “likely that payroll employment estimates in some industries were affected by the hurricanes.”

Key Background

The most widely cited release tracking the health of the labor market, the nonfarm payroll report is a combination of monthly surveys conducted with households and employers and is subject to frequent revisions as more data from prior months streams in. The unemployment rate is up noticeably from last October’s 3.8%, indicative of the tighter conditions facing American workers and job seekers, but the jobless rate remains well within the normal historic range, sitting lower than it ever was from 2000 to 2016.

How Is The Biden-Harris Job Market?

The last report before Tuesday’s election, the results are in for the labor market under President Joe Biden and Vice President Kamala Harris. From December 2020 through October, nonfarm payrolls rose from 142.5 million to 159 million, an increase of about 12%, the unemployment rate dipped from 6.7% to 4.1% and average hourly wages climbed from $29.90 to $35.46, a jump of 18.6%. Though the headline labor market data is unabashedly positive, the job growth and unemployment decline is at least partially a reflection of the recovery from the temporary shock of COVID-19 lockdowns and the wage growth is muddled by the extended bout of inflation, with the consumer price index up 20.1% from December 2020 to this September.