Job growth slows sharply as Election Day approaches

U.S. job growth slowed sharply in October as hurricanes and strikes disrupted the economy.

Employers added 12,000 jobs last month, far lower than the 223,000 created in September, according to the Labor Department.

But even as hiring slowed, the unemployment rate remained stable at 4.1%.

These closely watched figures, which give an indication of the strength of the American economy, are the last to be published before Americans go to the polls on Tuesday to elect the country's next president.

The Labor Department said health care and government jobs continued their upward trend last month, but fewer new manufacturing jobs were created due to strikes.

Some 30,000 workers at aerospace giant Boeing have been on strike since September 13, leading to a dramatic slowdown in aircraft production. Workers at Textron, another aerospace company, also launched industrial action.

Manufacturing employment fell by 46,000 in October, which the department said reflected “a decline of 44,000 in transportation equipment manufacturing, largely due to strikes.”

Employment showed little or no change during the month in other major industries.

The 12,000 jobs added to the payroll are well below forecasts. Economists polled by Reuters had forecast a payroll increase of 113,000.

But striking workers were not included in last month's employment data, contributing to an overall decline in nonfarm payrolls.

“On its face, the increase of 12,000 is obviously a low number, but it follows a very robust increase in September and was affected by strikes and perhaps hurricanes,” said Brian Coulton, an economist. Chief at Fitch Ratings.

Hurricane Helene devastated the southeastern United States in late September, while Hurricane Milton hit Florida a week later. A total of 512,000 people said they could not go to work due to extreme weather conditions.

Despite the larger-than-expected slowdown, interest rates are still expected to be cut by 0.25 percentage points next week by the US central bank, the Federal Reserve.

“Markets can probably leave the October jobs report aside. Clearly, the hurricane took a heavy toll on the numbers, clouding the picture of labor market strength, and is therefore unlikely to not have an impact on the trajectory of the Fed's key rates,” said Seema Shah. , chief global strategist at Principal Asset Management.

Lindsay Rosner of Goldman Sachs Asset Management added: “Stormy numbers but the sky is clearing for November 25 bps. [base point] cut.”

The Labor Department said it was likely that fewer than expected jobs created were affected by the hurricanes because its survey is not designed to “isolate the effects of extreme weather events,” adding that t was difficult to quantify its total impact.

Over the past year, job growth has also slowed and the unemployment rate has increased slightly, although it remains at historically low levels. The average hourly wage increased by 4% over the past 12 months.

Last month, the Fed cut interest rates 0.5 percentage points more than usual, saying it wanted to avoid further weakening of the labor market.

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