Jobs added
Relative Weather Impact
Unemployment RateWhile the unemployment rate was unchanged, there were only 12,000 new non-farm payroll jobs created last month, well under the 125,000-150,000 needed to account for natural workforce growth.
The consensus estimate of 100,000 was also under the replacement level, but not near as bad.
Obviously, the Boeing strike and hurricanes Helene and Milton had a lot to do with this, but these are very weak numbers:
Job growth slowed sharply last month, with workers sidelined by hurricane effects and the Boeing strike. The report, released just four days before the presidential election, could play a key role in how people view the economy as they head to the polls.
The Labor Department on Friday reported that the U.S. economy added a seasonally adjusted 12,000 jobs in October, versus a September gain of 223,000. That wildly missed even the muted expectations of economists, who had forecast 100,000.
Still, the unemployment rate stayed steady at a historically low 4.1%. That was in line with economists’ expectations.
Hurricanes Helene and Milton put thousands of people out of work across the Southeast, while the Boeing strike took more people off the job. Economists generally reckoned that the bulk of October’s downdraft was temporary, and didn’t affect the larger dynamics of the market. Wages, for example, continued to rise.
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Still, the report’s timing four days before the election isn’t great for Vice President Kamala Harris’s campaign.
Gee, ya think?
Absolute crap jobs numbers 4 days before the election might be a problem for the incumbent?
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Over the last several months, the general pace of job growth appeared to be slowing. Then, the September report released a month ago blew past expectations. Economists are now trying to figure out which is the one-off and which is the trend. The noise in Friday’s report makes it difficult to interpret.
Economist Brian Bethune of Boston College estimated that without the effects of the fall hurricanes, the Boeing strike and further adjustments, the October job-creation figure would have been 130,000, instead of the 12,000 the government reported.
Mr. Bethune's number would basically be treading water.
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The unemployment rate is based on a separate survey of households. Respondents who say they had jobs but weren’t at work because of bad weather are still counted as employed. The same goes for workers with jobs who are on strike.
Some context:
The Boeing strike began in mid-September. The Labor Department’s monthly report on strike activity, released last week, said that there were 33,000 Boeing workers on strike for the entire pay period that included Oct. 12. Friday’s report showed a loss of 46,000 manufacturing jobs, driven by a decline of 44,000 jobs in transportation equipment manufacturing that the Labor Department said “was largely due to strike activity.”
To some degree, the hurricanes’ effects have already dissipated. Initial claims for unemployment insurance moved notably higher in early October, but last week they slipped to their lowest level in months.
Meanwhile, the economy has continued to grow solidly, with the Commerce Department reporting Wednesday that gross domestic product grew at an inflation-adjusted 2.8% annual rate in the third quarter.
Those last two numbers are good.
Now I wonder what the f%$# the Federal Reserve will do when it makes its interest rate decision 2 days after the election. ¯\_(ツ)_/¯
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Even though the economy and the labor market appear poised to keep buttressing one another, there are also limits to how many jobs the U.S. can sustainably keep adding without driving unemployment down to the point that wages start running too hot, noted Joe Brusuelas, chief economist at RSM US. Immigration added to the pool of available workers for much of this year. But with the number of people entering the U.S. down sharply since the spring, that supply has been curtailed.
Meanwhile, with population growth slow, more people reaching retirement age, and the share of Americans aged 25 to 54 who are employed near its highest level in a quarter-century, finding qualified workers is no easy chore for companies looking to hire.
That all suggests to Brusuelas that the economy might only need to gain somewhere between 100,000 and 150,000 jobs each month to keep the unemployment rate steady.
I do not know what this means for the economy, nor do I know what it means for the Federal Reserve, but it ain't good political news.
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