Due in part to the impacts of hurricanes Helene and Milton and the Boeing strike, U.S. job creation slowed in October as nonfarm payrolls increased by 12,000, a mere fraction of the job growth seen in July and August, according to the Bureau of Labor Statistics (BLS).
The unemployment rate held steady at 4.1% and was in line with expectations. But the job growth figure was sharply below estimates of 100,000 for October. The employment growth pace was the weakest since December 2020.
The BLS cautioned that because of the impacts of the hurricanes on the Southeast, many markets were affected, and it is likely that payroll employment estimates in some industries were affected, but it was not possible to quantify the net effect.
Job creation for August and September were revised downward by 112,000 jobs. August increases were cut by more than half to 78,000, while September’s total was reduced by 31,000 to 223,000 new jobs.
The Boeing strike was the main reason that the manufacturing sector lost about 46,000 jobs for the month. The strike has idled an estimated 44,000 workers. Professional and business services saw a continued fall in employment for temporary help, which shed another 49,000 in October. Temporary employment services have lost 577,000 jobs since March 2022.
Employment categories showing strength included health care, which added 52,000 jobs, close to the average monthly gain of 58,000 jobs over the past year. Government employment rose by 40,000 jobs.
In October, the average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents, or 0.4%, to $35.46. Over the past 12 months, average hourly earnings have increased 4%.
Mike Fratantoni, a senior vice president and chief economist for the Mortgage Bankers Association, said that while the unemployment rate was unchanged, the household survey did show a decrease in employment of 368,000 workers. The report also showed that more than 400,000 individuals left the labor force as job seekers pulled back from the market in the face of slower hiring across the country. These data points speak to a general deceleration of economic growth going forward.
“MBA is forecasting a slowdown in the pace of economic growth beginning in this quarter and extending through 2025 and expects that the Federal Reserve will respond by continuing to cut rates at a steady pace over the next year, Fratantoni said. “Longer-term rates, including mortgage rates, have largely priced in this expected path by the Fed, but today’s news is likely to bring mortgage rates somewhat lower as it adds more evidence that the economy is on a path to slower growth.”
