A recruitment sign outside a Stewart’s gas station on Wednesday, October 2, 2024 in Catskill, New York, USA.
Angus Mordaunt | Bloomberg | Getty Images
A powerful hurricane and a massive labor strike could lead to a sharp drop in nonfarm payrolls in October, with job creation expected to be the slowest month in nearly four years.
Economists surveyed by Dow Jones said Friday that the Bureau of Labor Statistics reported that hurricanes Helen and Milton and the Boeing strike caused monthly payrolls to increase by just 100,000. I’m predicting it. If their predictions are correct, payrolls will be the lowest since December 2020 and down sharply from September’s 254,000.
Meanwhile, the report, which will be released at 8:30 a.m. ET, also forecasts that the unemployment rate will remain unchanged at 4.1%.
“If you look at that (major payrolls), I think unemployment will remain low and wages will rise faster than inflation, both of which highlight the health of the U.S. economy,” Chief of Staff Michael Arone said. I will do it,” he said. Investment Strategist at State Street Global Advisors.
On wages, average hourly wages are expected to increase by 0.3% in the month and 4% year-on-year, the same annual figure as in September, further reinforcing the view that inflation is holding steady but not accelerating. I’m strengthening it.
Regardless of the outcome, the market may choose to take a look at this report, as too many one-off hits have decimated employment.
“While the top-line numbers will be a bit noisy, we think they are sufficient to continue to judge that the soft landing is intact and that the U.S. economy remains in good shape,” Arone added.
The hurricane caused financial losses that could reach historic levels, and the Boeing strike put 33,000 workers out of work.
Goldman Sachs estimates that Herren cut up to 50,000 jobs from its payroll, although Hurricane Milton probably came too late to affect the October tally. Meanwhile, Goldman added that the Boeing strike could reduce total employment by 41,000 jobs, and expects total employment to increase by 95,000.
The data is solid
But indicators leading to closely watched employment statistics show that despite the damage caused by the storm and strikes, hiring continues well and layoffs are low.
Payroll firm ADP said this week that private companies announced 233,000 new jobs in October, well above expectations, while new jobless claims fell to 216,000, the lowest since late April. announced that it had reached its lowest level.
Still, the White House estimates that these events could cumulatively hit the payroll by up to 100,000 people. Jared Bernstein, chairman of the Council of Economic Advisers, said Wednesday that “the disruption will make this month’s jobs report more difficult to interpret than usual.”
In the post-COVID-19 era, employment statistics in general have been noisy.
Earlier this year, the BLS announced a revised benchmark that would reduce the number of deaths by 818,000 people over the 12-month period ending March 2024 from the previous statistic. The revision from the beginning of the year to July shows a net decrease of 310,000 people from the original forecast.
“This report adds to the overall picture that the labor market is still growing, but the reality is that while it is growing, it is slowing,” said Julia Pollack, chief economist at ZipRecruiter. It means that there is.” “Growth is slowing and becoming more narrowly concentrated in a few sectors.”
The main sectors for job creation this year were government, healthcare, leisure and hospitality. Pollack said that trend continues, particularly in the medical field, but ZipRecruiter is also seeing increased interest in related businesses such as finance and insurance, as well as skilled trades.
But he said the overall picture is that the market is slowing and will need support from the Federal Reserve through interest rate cuts to halt the decline.
“For the past two quarters, job growth has been below the pre-pandemic average, and the distribution of job gains is unusually narrow,” Pollack said. “This has real implications for job seekers and workers who feel disenfranchised, many of whom are struggling to find acceptable work. I think we need to pay close attention to the labor market.”
