US economy added 12,000 jobs in October, well below economists’ expectations

U.S. job growth slowed in October, well below economists' expectations, but the unemployment rate remained flat.

The Labor Department reported Friday that employers added 12,000 jobs in October, well below the 113,000 increase expected by economists at LSEG and the lowest number since December 2020. It became.

The unemployment rate was 4.1%, in line with expectations.

Job growth numbers for the past two months have all been revised downwards, with job creation for August revised down by 81,000 from an increase of 159,000 to 78,000, and job creation for September from an increase of 254,000 to 220,000. The figure was revised downward by 31,000 to 3,000.

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Private sector payrolls fell by 28,000 in October, although LSEG economists had expected private sector payrolls to rise by 90,000.

Manufacturing employment fell by 46,000 jobs in October, the Bureau of Labor Statistics (BLS) said, largely due to strike activity in transportation equipment manufacturing. About 33,000 unionized machinists at Boeing have been on strike since early September.

The Fed's preferred inflation measure showed that price increases continued to slow in September.

The construction sector added 8,000 jobs, below the monthly average of 20,000 over the past 12 months.

The health care sector added 52,300 jobs in October, close to last year's average monthly increase of 58,000.

The government added 40,000 jobs in October, roughly in line with the average monthly increase of 43,000 over the past 12 months.

The BLS noted that Hurricane Helen made landfall in the Southeast before the employment survey's reference period, but Hurricane Milton struck the same area during the reporting period.

The agency noted that it had made no changes to its October report as a result of the hurricane, saying, “While salaried employment estimates for some industries were likely affected by the hurricane, there was a net impact on excess wages.'' It is not possible to quantify the impact.” -Monthly changes in national employment, hours worked, and income estimates, as the establishment survey is not designed to isolate the effects of extreme weather events. ”

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Manufacturing lost 46,000 jobs in October, due in part to a strike by Boeing's machinists. (Emily Elkonin/Bloomberg via Getty Images/Getty Images)

The labor force participation rate in October was 62.6%, down slightly from 62.7% the previous month, but little changed from last year.

Average hourly wages for all employees on the private nonfarm payroll increased 13 cents, or 0.4%, to $35.46 in October. Over the past 12 months, average hourly wages have increased by 4%.

The number of people permanently unemployed rose to 1.8 million in October, but the number of people on temporary layoff remained almost unchanged at 846,000.

The number of people considered long-term unemployed, defined as having been unemployed for 27 weeks or more, was little changed in October at 1.6 million, up from 1.3 million a year ago. Long-term unemployed people account for 22.9% of the total unemployed.

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“As expected, October's employment report shows a significant impact from Hurricanes Milton and Helen,” said Bill Adams, chief economist at Comerica Bank. “Due to the large, one-off shock that hit the economy in October, it is impossible to know whether the direction of the job market changed in that month, but the downward revision in employment growth through September reflects the impact of these shocks. This shows that the economy is cooling down before this happens.

The latest jobs report comes as the Federal Reserve is scheduled to meet next week, with market expectations that policymakers will announce a 25 basis point (bp) interest rate cut.