Announced this morning, the economy added just 12,000 jobs in October, much less than expected and with a sizable revision lower to the previous month. The Health Care and Social Assistance industry and Government jobs were relatively strong, while the Manufacturing industry and Professional and Business Services industry were relatively weak. The Unemployment Rate held steady at 4.1% as expected and the Labor Force Participation Rate at 62.6% is one tenth less than the previous month. Average Hourly Earnings increased 0.4% in October, slightly higher than expected, and grew 4.0% on an annual basis. In addition, Average Weekly Hours were 34.3, which is the same as the revised figure from the previous month.
Overall, a weak headline payrolls figure that was much less than expected, coupled with a steady unemployment rate. The data was likely impacted by hurricanes Helene and Milton as well as the ongoing labor strike at Boeing given the manufacturing sector was relatively weak. However, initial claims over the past two weeks are back to the low 200,000 level suggesting the hurricane impact has waned.
Earlier this week, the core PCE measure increased 2.7% on an annual basis, which is the same level as the previous month and remains above the Federal Reserve’s 2% target. Consumers seem to be continuing to spend money, which is possible when they continue to have jobs. Given these data points and this morning’s payroll results, next week both the outcome from the election and Fed’s interest rate decision and commentary will be closely watched.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks lower and equity futures are higher as we head into the market open.
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