The U.S. economy experienced minimal growth in October, with only 12,000 jobs added, due to the influence of hurricanes and the Boeing strike.

• The number of nonfarm payrolls rose by 12,000 in October, which was lower than expected and significantly less than the previous month.
• The unemployment rate held at 4.1%, in line with expectations.
• The manufacturing sector may have lost 88,000 jobs due to the Boeing strike and hurricanes.
• The previously reported job creation totals for August and September were revised down by 112,000.

The employment picture was negatively affected by the impacts of storms in the Southeast and a significant labor impasse, resulting in a slowdown of job creation in October.

The Bureau of Labor Statistics reported on Friday that nonfarm payrolls increased by 12,000 for the month, which was below the Dow Jones estimate of 100,000 and down sharply from September. Additionally, October's gain was the smallest since December 2020, further adding to the downbeat expectations.

Despite expectations, the unemployment rate remained at 4.1%, while the broader measure of unemployment that includes discouraged workers and part-time jobs for economic reasons also remained unchanged at 7.7%.

The manufacturing sector lost 46,000 jobs overall due to the Boeing strike, according to the BLS.

The report acknowledged the influence of hurricanes Helene and Milton but stated that it is impossible to determine the overall impact of the storms on the number of jobs.

The average hourly earnings increased by 0.4% in the month, slightly higher than the estimated 0.3%, while the 4% 12-month gain was in line with the forecast. The average work week remained at 34.3 hours.

Despite the bad news, stock market futures are expected to open strongly on Wall Street, while Treasury yields have plummeted. The meager jobs numbers and wages that are in line with expectations will likely lead to another interest rate cut from the Federal Reserve next week.

"Cory Stahle, an economist at the Indeed Hiring Lab, stated that while October's jobs report initially appears to indicate growing instability in the U.S. labor market, the underlying data is complex and influenced by climate and labor disruptions. Despite the real and significant effects of these events, they are likely short-term and should not be taken as evidence of a failing job market."

The upcoming presidential election, between Democrat Kamala Harris and Republican Donald Trump, is expected to be a close call. Despite this, the latest employment data has raised concerns about the state of the economy. Lisa Sturtevant, the chief economist at Bright MLS, stated that the light jobs number "casts a murky shadow heading into next week."

The weak October report contained significant downward revisions from previous months, with August's gain reduced to 78,000 and September's initial estimate cut to 223,000. These revisions lowered previously reported job creation totals by 112,000.

Despite job losses in several sectors, the health care and government sectors led job creation, adding 52,000 and 40,000 positions, respectively.

The BLS reported that temporary help services experienced a 49,000 drop in addition to the anticipated decline in manufacturing, and this category is often viewed as an indicator of underlying job strength. Since March 2022, the category has seen a decline of 577,000.

The leisure and hospitality sector experienced a decline of 4,000, while retail trade and transportation and warehousing also reported modest declines.

The hiring numbers in the household survey were weaker.

The labor force shrank by 388,000 people, with full-time employment declining by 164,000 and part-time employment falling by 227,000.

The report details the impact of hurricanes Helene and Milton on the Southeast, particularly Florida and North Carolina, as well as the negative effects of the Boeing strike on the slowing labor market. Recent updates suggest that a resolution to the Boeing strike may be imminent.

Despite a slight decline from the previous year, job creation in 2024 had been consistently strong, with an average of nearly 200,000 new jobs being created each month.

Recent cracks have raised concerns at the Federal Reserve that although the year-over-year pace of inflation is slowing, an elevated interest rate could harm the labor market and jeopardize the ongoing economic expansion.

In September, policymakers made an unprecedented move for a growing economy by reducing their benchmark short-term interest rate by half a percentage point, which is double the typical quarter-point increments the Fed usually employs.

The Federal Open Market Committee will announce its decision next Thursday on whether to cut interest rates by a quarter point at each of its remaining meetings this year.