WASHINGTON — U.S. employers added just 12,000 jobs in October, a figure economists say was limited by the effects of strikes and hurricanes that left many workers temporarily off payrolls. The report provided a somewhat blurry view of the labor market at the end of a presidential campaign that has largely revolved around voters’ feelings about the economy.
Last month’s hiring increase was significantly less than the 223,000 jobs added in September. But economists have estimated that hurricanes Helene and Milton, combined with strikes at Boeing and elsewhere, had the effect of reducing net job growth by tens of thousands in October.
Friday’s report from the Labor Department also showed that the unemployment rate remained at 4.1% last month. The low unemployment rate suggests that the labor market remains fundamentally healthy, although not as robust as earlier this year. Combined with an inflation rate that has fallen from its peak in 2022 to near pre-pandemic levels, the broader economy appears to be in a strong position heading into Election Day.
The government did not estimate how many jobs were likely temporarily eliminated from payrolls last month. But economists have said they think the storms and strikes caused up to 100,000 job losses. Reflecting the impact of the strikes, factories lost 46,000 jobs in October.
However, in a sign of caution for future hiring, temporary employment agencies lost 49,000 jobs last month. Companies often hire temporary workers before committing to full-time employees. On the other hand, health care companies added 52,000 jobs in October, and state and local governments added 39,000.
The October jobs report also revised down the government’s estimate of job gains in August and September by a combined total of 112,000, indicating that the labor market was not as robust then as initially thought.
“The large, once-in-a-lifetime shocks that hit the economy in October make it impossible to know whether the labor market was changing direction in the month,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “But downward revisions to employment growth through September show that it was cooling before these shocks occurred.”
Still, economists have noted that the United States has the strongest economy of any advanced country in the world, one that has proven surprisingly durable despite the pressure of high interest rates. This week, for example, the government estimated that the economy expanded at a healthy 2.8% annual rate last quarter, with consumer spending helping to drive growth.
However, as voters choose between former President Donald Trump and Vice President Kamala Harris, large numbers of Americans have said they are unhappy with the state of the economy. Despite falling inflation, many people are exasperated by high prices, which skyrocketed during the recovery from the pandemic recession and remain about 20% higher on average than they were before inflation began to rise. accelerate in early 2021.
With inflation having cooled significantly, the Fed is expected to cut its benchmark interest rate next week for the second time and likely again in December. The Fed’s 11 rate hikes in 2022 and 2023 managed to help slow inflation without tipping the economy into a recession. A series of Fed rate cuts should lead, over time, to lower lending rates for consumers and businesses.
Meanwhile, there have been signs of a slowdown in the labor market. This week, the Department of Labor reported that employers posted 7.4 million job openings in September. While that’s still more than employers posted on the eve of the 2020 pandemic, it amounted to the lowest openings since January 2021.
And 3.1 million Americans quit their jobs in September, the lowest number in more than four years. A drop in resignations tends to indicate that more workers are losing confidence in their ability to get a better job elsewhere.
Still, with the unemployment rate low and the number of people seeking unemployment aid low, Americans overall continue to enjoy unusual job security.
“The cooling of the labor market is still ongoing,” said Sarah House, senior economist at Wells Fargo. “Overall, the labor market is not collapsing, but it is too early to say that conditions have stabilized.”
For employers, a softer labor market is easing labor shortages that left many of them struggling to find and keep workers over the past few years.
Jon Abt, co-president of Abt Electronics in Chicago, said it has become somewhat easier to hire, and his company has felt less pressure to raise wages this year. However, finding qualified installers and service technicians remains a challenge.
The electronics retailer, which employs 1,750 people, including 200 part-time workers, runs its own training program, works with technical schools to find workers and also takes applicants by referral. If the job market deteriorates further, Abt said, “it will be easier to find the quality people we are looking for.”
