US hiring slowest since Biden took office – Economy

U.S. job growth slowed sharply in October due to temporary hurricanes and labor strikes, the latest major economic snapshot in a bitter presidential election campaign where cost-of-living concerns dominated voters’ concerns.

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

Hiring and unemployment data will be closely scrutinized by the teams of both presidential candidates – Democrat Kamala Harris and Republican Donald Trump – but employment numbers would be higher if not for devastating hurricanes and labor strikes.

Some analysts warn that unusually low hiring rates threaten to affect the way Americans view the job market.

The collective impact of Hurricanes Helen and Milton, as well as work stoppages for Boeing workers and others, could cut job growth by nearly 100,000 positions, Council of Economic Advisers Chairman Jared Bernstein said earlier.

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

This is the slowest pace of hiring since late 2020 and since President Joe Biden took office.

“Jobs growth is expected to rebound in November as our hurricane recovery efforts continue,” Biden said Friday, also highlighting a new contract proposal for striking Boeing workers.

But Trump called the report a “huge embarrassment,” blaming Harris for cutting manufacturing jobs even though that was badly hampered by strikes.

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

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

But he added: “It is likely that the hurricanes impacted employment estimates in some industries.”

The report also said manufacturing employment fell by 46,000, while transportation equipment manufacturing lost 44,000 jobs, largely due to strike activity.

In addition to the roughly 33,000 striking Boeing workers, 5,000 Textron Aviation machinists and 3,400 hotel workers took part in the strike, said Lydia Boussour, senior economist at EY.

In the labor survey that tracks hiring, workers who are on strike for the entire pay period are not counted as employed, Boussour added.

Meanwhile, Hurricane Helen made landfall in late September, meaning some people were likely unable to return to work while the study was being conducted.

Likewise, the week of research coincided with the landfall of Hurricane Milton.

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

Weaker hiring data “will likely have an impact on how people assess economic conditions,” Farooqi told AFP.

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 senior fellow at the Brookings Institution in Washington, expects the public was already expecting lower numbers this time.

A more serious problem could be a sharp slowdown in economic growth, given temporary factors.

“Rising incomes are keeping consumers’ wallets open. Any hiccup in this process could mean the engine of economic growth begins to falter,” said Nationwide economist Oren Klachkin.

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

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

Wages excluding temporary assistance or leisure and hospitality (usually hit hard by hurricanes) along with transportation equipment manufacturing rose only twice the average for the previous 12 months, he said.

That hasn’t impacted the unemployment rate because those on strike or unable to work due to weather are still considered employed, he said.

But a study tracking it showed a decline in employment of 368,000, added Mike Fratantoni, chief economist at the Mortgage Bankers Association.

He added that while there are no major layoffs, the number of vacancies continues to decline.

Analysts expect the Fed to cut rates by a quarter of a percentage point next week rather than leave them at all.

“Fed officials will likely analyze the noisy payroll data,” Boussour said.

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