Wrapup 2: US job growth slows sharply in October; unemployment rate unchanged at 4.1%

Textron

01/11/2024 12:35

(Updates with report)
    By Lucia Mutikani
       WASHINGTON, Nov 1 (Reuters) - U.S. job growth slowed
sharply in October amid disruptions from hurricanes and strikes
by aerospace factory workers, but the unemployment rate held
steady at 4.1%, offering assurance that the labor market
remained on solid footing ahead of Tuesday's election.
    Nonfarm payrolls increased by 12,000 jobs last month after
surging by a downwardly revised 223,000 in September, the Labor
Department's Bureau of Labor Statistics said on Friday.
    Economists polled by Reuters had forecast payrolls rising
113,000. Estimates ranged from no jobs added to 200,000
positions created. 
    Hurricane Helene devastated the Southeast in late September
and Hurricane Milton lashed Florida a week later. A total 41,400
new workers were strike, including machinists at Boeing  BA.N 
and Textron, an aircraft company, when employers were surveyed
for October's employment report. The remaining 3,400 were
workers at three hotel chains in California and Hawaii.
    Workers who do not receive a paycheck during the survey
period, which includes the 12th day of the month, are counted as
unemployed in the survey of establishments from which the
payrolls number is calculated. 
    The Labor Department's closely watched employment report was
the last major economic data before Americans head to the polls
to choose Democratic Vice President Kamala Harris or Republican
former President Donald Trump as the country's next president. 
    Polls show the race is a toss-up. Americans have not warmed
up to the economy's strong performance, which has outshined its
global peers, rankled by high prices for food and rents. Low
layoffs have been the hallmark of the labor market's strength.
    The unemployment rate was unaffected by the distortions as
the striking workers would be counted as employed in the
household survey from which the jobless rate is derived. 
    Workers unable to work because of bad weather would be
reported as employed, "with a job, but not at work" as per the
BLS' classification.
    Economists expected the Federal Reserve to sort through the
noise and cut interest rates by 25 basis points next Thursday. A
rise in the unemployment rate to 4.3% in July from 3.8% in March
was one of the catalysts for the U.S. central bank's unusually
large half-percentage-point interest rate cut in September, the
first reduction in borrowing costs since 2020. 
    The Fed's policy rate is now set in the 4.75%-5.00% range,
having been hiked by 525 basis points in 2022 and 2023. 
    Though employers have pulled back on hiring, they are
retaining their workers, underpinning wage gains and consumer
spending. Average hourly earnings rose 0.4% after gaining 0.3%
in September. Wages increased 4.0% in the 12 months through
October after advancing 3.9% in September.

 (Reporting by Lucia Mutikani; Editing by Andrea Ricci and Dan
Burns)
 ((Lucia.Mutikani@thomsonreuters.com))