U.S. Hiring at Its Slowest Rate Since Biden Took Office

 U.S. job growth experienced a sharp decline in October, affected by hurricanes and labor strikes, providing a crucial economic snapshot in a closely contested presidential election focused on cost-of-living concerns. The economy added only 12,000 jobs last month, falling far short of expectations and down from a revised 223,000 in September, according to the Department of Labor. The unemployment rate remained steady at 4.1 percent.

Both presidential candidates—Democrat Kamala Harris and Republican Donald Trump—will closely analyze this hiring and unemployment data. Analysts suggest that the job figures would have been stronger without the adverse effects of hurricanes and strikes.

Hurricanes Helene and Milton, along with strikes by Boeing workers and others, could potentially reduce job growth by up to 100,000 positions, as noted by Jared Bernstein, Chair of the Council of Economic Advisers. The latest figures were notably below the market consensus estimate of 120,000 jobs added, marking the slowest hiring rate since late 2020 and President Biden's inauguration.

Biden expressed optimism for a rebound in November, citing ongoing hurricane recovery and new contract proposals for striking Boeing workers. In contrast, Trump labeled the report "a great embarrassment" and criticized Harris for manufacturing job declines, attributing them to strike activity.

Average hourly earnings rose by 0.4 percent from September, slightly exceeding expectations. The Labor Department acknowledged that its survey does not specifically account for the impact of extreme weather, but indicated that the hurricanes likely influenced payroll estimates in various industries.

Manufacturing jobs saw a decline of 46,000, driven largely by a 44,000 drop in transportation equipment manufacturing due to strike actions. Among the striking workers were approximately 33,000 from Boeing, alongside 5,000 machinists at Textron Aviation and 3,400 hotel workers.

Economists suggest viewing the hiring data as potentially misleading due to the temporary factors at play. Some analysts indicated that the weak job figures might influence public perception of economic conditions. Despite ongoing inflation, many households are not feeling the benefits of a strong labor market, as noted by economist Rubeela Farooqi.

Looking ahead, economist Harry Holzer believes the public anticipated these lower numbers. However, any significant slowdown beyond temporary factors could signal a weakening economy. Nationwide economist Oren Klachkin noted that while the labor market is cooling, it’s not yet cold.

Economist Samuel Tombs cautioned that strikes and hurricanes only partially explain the job market's weaknesses. Payrolls in sectors excluding temporary help and leisure and hospitality saw job growth at half the average rate of the previous year. Those on strike or unable to work due to weather conditions remain counted as employed, but a 368,000 drop in employment was reported.

While major layoffs are not occurring, there is a continued reduction in job openings. Analysts anticipate that the Federal Reserve may lower rates by a quarter percentage point next week, taking into account the fluctuating payroll figures.