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U.S. employers added just 12,000 new jobs last month as hurricanes and strikes sent payrolls sharply lower
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U.S. employers added just 12,000 new jobs last month as hurricanes and strikes sent payrolls sharply lower

WASHINGTON — America’s employers added just 12,000 new jobs in October; Economists say that number has been reduced by strikes and hurricanes that have temporarily left many workers off payroll. The report provided a somewhat cloudy view of the job market at the end of the presidential race, focusing heavily on voters’ feelings about the economy.

Last month’s hiring gains were down significantly from the 223,000 jobs added in September. But economists estimate that Hurricanes Helene and Milton, combined with strikes at Boeing and elsewhere, had the effect of slashing net employment growth in October by tens of thousands of job losses.

The Labor Department’s report on Friday also showed that the unemployment rate remained at 4.1% last month. The low unemployment rate shows that the labor market is still fundamentally healthy, although not as strong as it was at the beginning of this year. Combined with the inflation rate falling from its peak in 2022 to near pre-pandemic levels, the overall economy appears to be on solid footing on the eve of Election Day.

The government did not estimate how many jobs were temporarily removed from payrolls last month. But economists said they think the storm and strikes led to the loss of up to 100,000 jobs. Due to the impact of strikes, factories lost 46,000 positions in October.

In a warning sign for future hires, temporary job placements created 49,000 jobs last month. Companies often hire temporary workers before hiring full-time employees. Meanwhile, healthcare companies added 52,000 new jobs in October, and state and local governments employed 39,000 people.

The October employment report also revised down the government’s forecast for employment growth in August and September by a total of 112,000 jobs; This showed that the labor market was not as strong as initially thought.

“The large one-time shocks that affected the economy in October make it impossible to know whether the job market will change direction this month,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “But downward revisions to employment growth through September suggest employment had cooled before these shocks arrived.”

Still, economists say the United States has the strongest of the world’s advanced economies and is surprisingly resilient despite the pressure of higher interest rates. This week, for example, the government estimated that the economy grew at a healthy annual rate of 2.8% last quarter, as consumer spending, the heart of the economy, helped boost growth.

But as voters choose between former President Donald Trump and Vice President Kamala Harris, many Americans said they were dissatisfied with the state of the economy. Despite the decline in inflation, many people are fed up with high prices that have risen during the recovery from the pandemic recession and remain an average of 20% higher than before inflation began accelerating in early 2021.

With inflation cooling significantly, the Fed is poised to cut its benchmark interest rate for the second time next week and possibly again in December. The Fed’s 11 interest rate hikes in 2022 and 2023 managed to help slow inflation without sending the economy into recession. A series of Fed rate cuts will, over time, lead to lower borrowing rates for consumers and businesses.

Meanwhile, there are signs of slowing down in the labor market. This week, the Labor Department reported that employers posted 7.4 million jobs in September. While this is still more than the figure employers announced on the eve of the 2020 pandemic, it was the fewest job postings since January 2021.

And 3.1 million Americans quit their jobs in September; this was the lowest figure in more than four years. The decline in turnover rates suggests that more workers are losing confidence in their ability to find a better job elsewhere.