US Adds Just 12K Jobs in October Amid Storms, Strikes Disruptions
Nonfarm payrolls rose 12,000 in October, according to the Bureau of Labor Statistics, compared with the median consensus of 100,000. The unemployment rate remained unchanged at 4.1%.
October was the weakest month for job growth since December of 2020. Meanwhile, September payrolls were revised down 31,000 to 223,000 and August was revised down by 81,000, to 78,000. With these revisions, employment in August and September combined is 112,000 lower than previously reported.
Average hourly earnings increased +0.4%, slightly higher than the +0.3% consensus, running at the same pace as in September. On an annual basis, earnings increased 4.0% versus +4.0% expected and +3.9% prior.
Work stoppages stemming from severe weather events like Hurricane Milton and worker strikes, such as the Boeing factory worker walkout, likely contributed to the weak report. The government said it’s “likely that payroll employment estimates in some industries were affected by the hurricanes.”
The report has done little to sway the market in terms of interest rate cuts. According to the CME FedWatch Tool, the odds of a quarter-point cut are now 99.6%, up from 96.4% prior to the release.
Yet, some economists believe the Fed should hold off next week. “I would not be cutting rates next week,” Joe Lavorgna, chief economist at SMBC Nikko Securities America, told CNBC. “The Fed probably will but the market has been so conditioned by (Chair Jay) Powell and Fed rhetoric that it doesn’t want to back away from it,” citing that inflation is not where it needs to be, and growth remains strong.
