The U.S. job market showed signs of cooling in October as overall job growth stalled significantly, which has sparked both concern and debate as the nation heads toward the pivotal Election Day. The Labor Department reported on Friday, November 1, 2024, the addition of only 12,000 jobs for the month, far below economists’ expectations of around 115,000. The unemployment rate held steady at 4.1 percent, maintaining the same figure for October as it did for September.
This disappointing jobs report arrives at a time when the economy has consistently been rated as one of the top issues for voters heading to the polls, making the ramifications of the report even more impactful. The figures reflect the effects of concurrent significant labor strikes, particularly one affecting Boeing, and severe weather events such as Hurricanes Helene and Milton, which swept through parts of the Southeast.
According to the Bureau of Labor Statistics (BLS), the underwhelming job gains were influenced by damage from these hurricanes, with both storms intersecting the job survey periods. Hurricane Helene, for example, hit shortly before the BLS began collecting data, followed closely by Hurricane Milton impacting Florida. The BLS noted its inability to gauge the complete extent of job losses due to these extreme weather events.
“It is likely some industries saw payroll estimates affected by the hurricanes; nonetheless, we cannot quantify the total effect on national employment changes,” the BLS stated. This was echoed by experts who criticized the report as heavily obscured by the noise of environmental disturbances and strikes. Robert Frick, chief corporate economist at Navy Federal, likened attempting to discern meaningful insights from the October jobs report to seeking directions from malfunctioning technology: "Trying to understand October's labor situation from this jobs report, distorted by two major hurricanes and a major strike, is like trying to get directions from the GPS on a smashed cell phone.”
The low job growth also corresponds with downward revisions for August and September, adjusting the previous estimates by over 112,000 jobs combined. These revisions indicate potential underlying weaknesses within the labor market rather than merely the short-term disruptions. Notably, job creation rates had averaged around 104,000 over the last three months, down significantly from 189,000 over the preceding six months.
Manufacturing bore the brunt of this latest report, with the sector experiencing job declines of around 46,000 jobs, largely due to the Boeing strike which not only impacted their workforce but also spilled over to suppliers.
Beyond the immediate job figures, wage growth painted another picture of the employment environment. Average hourly earnings climbed by 0.4 percent from the previous month, reflecting a year-on-year increase of 4 percent. Some economists argued this might indicate stronger pay pressures, particularly as lower-wage positions tend to drop off during adverse economic conditions.
Jared Bernstein, chair of the White House Council of Economic Advisers, addressed these figures, emphasizing the importance of the unemployment rate as it provides more stable indicators of economic health divorced from volatility. Bernstein pointed out, “If you account for the temporary disturbances from the hurricanes and strikes, the underlying pace of job growth is still healthy, likely around the 150,000 mark,” which he suggested is sufficient to keep the unemployment rates stable.
Political interpretations of the report quickly surfaced, with the White House insisting this job growth stall should be viewed through the lens of exceptional circumstances rather than as indicative of fundamental economic issues. Vice President Kamala Harris, along with other Democrats, highlighted the positive trends, including GDP growth, as signs of resilience within the economy. This was countered energetically by Republican candidates, who capitalized on the weak report to undermine Harris’s and President Biden’s economic credentials.
“This is one more piece of evidence of the staggering incompetence of the Biden-Harris Administration,” declared Republican Representative Jason Smith. Meanwhile, Trump’s campaign tagged the report as “a catastrophe” asserting it revealed the administration’s failures under Harris’s leadership.
The weak jobs numbers are not just political fodder but also come as the Federal Reserve prepares for its next meeting to discuss interest rate strategies. Experts believe this data, compellingly influenced by hurricane and strike disruptions, shouldn’t drastically change the Fed’s course toward rate adjustments. With futures traders assigning as high as 98 percent probability to upcoming rate cut actions, the expectation is the Fed may be more inclined to focus on longer-term trends rather than short-term volatility.
Overall, as America approaches Election Day, the complexity of the jobs report reflects not only the immediate economic situation but also the broader narrative as competing political forces seek to frame the public perception around economic management and recovery.
The stakes are higher than ever as both sides of the political spectrum trade statistics and strategies, all under the watchful scrutiny of voters who will cast their ballots amid these pivotal economic discussions.
With the election looming and the economy as top-of-mind for many voters, the October jobs report poses questions about the future of U.S. employment, economic policy under the Biden administration, and the potential shifts voters may pursue come Election Day.
