US Labor Market Struggles with Weather Fluctuations and Strikes: Unexpected Decline in Employment Numbers

The latest U.S. labor market data shows an unexpectedly low increase in new hires in October, attributed to weather-related disruptions and strikes. According to figures released by the U.S. Department of Labor on Friday, only 12,000 new jobs were created, far below the 100,000 predicted by economists. Meanwhile, the unemployment rate remained steady at 4.1 percent. The October figures are significantly lower than the revised 223,000 new hires in September. Economists had warned ahead of the release that recent hurricanes and a strike at Boeing (BA) could negatively impact the employment data for October. The department emphasized that while it is likely some sectors were affected by the extreme weather events, it is difficult to isolate the overall effect on national employment figures. However, the national unemployment rate, according to a household survey, remained unaffected. One positive aspect was the growth in wages, a significant indicator for assessing inflationary pressure. Wages rose by 4.1 percent compared to the previous year, following an annual increase of 4 percent in September. On a monthly basis, wages recorded a 0.4 percent rise compared to 0.3 percent in September. The report also noted a decline in the labor force participation rate, which fell from 62.7 percent to 62.6 percent. This release is considered the last major economic data collection before the next monetary policy decision by the Federal Reserve on November 7. According to the CME FedWatch Tool, the probability of a 25 basis point rate cut by the Federal Reserve in the coming week was about 95 percent.