Silke Mayr The latest employment report from the U.S. Bureau of Labor Statistics (BLS), released on Friday, revealed that the economy added only 12,000 jobs in October—far below the anticipated 100,000. This marks the smallest job gain in four years, dating back to December 2020.
In the context of recent trends, the average monthly job increase over the past year has been 194,000, making October’s figures particularly disappointing. Lydia Boussour, a senior economist at EY, described the report as showing “a material weakening in job growth.”
Several factors contributed to this unexpected decline. Notably, Hurricane Helene and Hurricane Milton, along with a three-day dockworkers’ strike in early October, impacted job creation. The report indicated that “employment declined in manufacturing due to strike activity.”
While the report suggested that the hurricanes likely affected payroll estimates across various industries, it acknowledged the difficulty in quantifying their exact impact, as the survey isn’t designed to isolate effects from extreme weather.
Despite the disappointing job growth, the unemployment rate remained steady at 4.1%, the same as in September. However, the number of unemployed individuals rose to seven million in October, up from 6.4 million at the same time last year.
The Federal Reserve will consider this report during its upcoming meeting to discuss interest rate policies. Boussour noted that “the October jobs report likely keeps the Fed on track for a cautious 25bps rate cut at next week’s policy meeting,” suggesting that officials may overlook the fluctuations in job figures and focus instead on the broader trends in the labor market, which indicate a cooling economy and ongoing wage growth disinflation.