Boeing strike, extreme weather tank October job numbers

Two hurricanes and a massive labor stoppage combined to bring the October jobs count down to 12,000, according to a Friday report from the Labor Department, a precipitous drop from September’s revised figure of 233,000 new positions and well off the average 194,000 monthly job gains over the past year.
The Bureau of Labor Statistics noted in its monthly assessment that the survey data was the first collected since hurricanes Helene and Milton struck the U.S. and was unable to determine the extent to which those storms impacted reporting. Its analysts also noted that an October decline of 46,000 jobs in the manufacturing sector last month was mostly accounted for by the 44,000 Boeing machinists who have remained on strike since a union work stoppage began on Sept. 13.
In spite of the environmental and labor market anomalies, U.S. unemployment for October remained unchanged at 4.1%, as did the number of unemployed persons at around 7 million. Unemployment stood at 3.8% this time last year while 6.4 million were out of work and actively seeking new employment 12 months ago, according to the report.
Most economists characterize the October jobs data as a blip, though the overall U.S. labor market has trended incrementally slower over the past year.
“At first glance, October’s jobs report paints a picture of growing fragility in the U.S. labor market, but under the surface is a muddy report roiled by climate and labor disruptions,” Cory Stahle, an economist at the Indeed Hiring Lab, told CNBC on Friday. “While the impacts of these events are real and should not be ignored, they are likely temporary and not a signal of a collapsing job market.”
The job market data release closes out a week that saw other federal data that reflects a U.S. economy that’s still growing amid robust consumer spending and weakening inflation.
A Wednesday Commerce Department report on the nation’s gross domestic product for July through September, a measure that accounts for all the goods and services produced during that time period, showed 2.8% growth for the quarter, shy of the 3.1% expected by Dow Jones economists and down from second quarter GDP growth of 3.0%.
The 2.8% expansion rate reflects a healthy arc for the U.S. economy and was supported by a 3.7% increase in consumer spending over the three-month period from July through September. Consumer spending has an outsize impact on the overall U.S. economy, accounting for some two-thirds of the nation’s GDP.
The report noted that, in addition to the jump in consumer spending, increases in exports and government spending also helped bolster the overall growth rate for the quarter.
On Thursday the Personal Consumption Expenditures report from the Commerce Department found U.S. inflation slipped to 2.1% in September, the lowest level since February 2021 and a data point reflecting a continued easing of price increases on consumer goods and services since a peak of nearly 7.3% in June 2022.
The PCE price index rose 0.2% on a monthly basis and came in at an annual rate of 2.1%, down from August’s 2.3%. Core PCE, which strips out volatile food and energy prices, measured 2.7% for the month, up 0.3% from August. The report also found personal income and consumer spending rose on a monthly basis, 0.3% and 0.5%, respectively.
The Personal Consumption Expenditures index is the Federal Reserve’s preferred inflation metric and one that tracks prices on a representative basket of goods and services similar to the Labor Department’s more mainstream inflation measure, the Consumer Price Index. But while the CPI price tracking is based on consumer survey results, the PCE looks at data on goods and services sold by businesses.
Last month, the Fed levied a 0.5% reduction to its benchmark federal funds rate, a move that signaled the monetary body’s shift in focus from quelling inflation to shoring up a weakening U.S. jobs market. Before the adjustment, the Fed’s overnight intrabank lending rate had stood at 5.25% to 5.5% since last summer and was the highest in 23 years after a series of 11 straight increases levied earlier by the monetary body in its fight against high inflation.
“It’s essentially the soft landing that many of us dreamed of,” said Gregory Daco, chief economist at the tax and accounting firm EY, referring to a scenario in which high interest rates manage to tame inflation without causing a recession, per The Associated Press on Thursday. “You really have the best of both worlds, with consumer spending growth remaining resilient and inflation moving within striking distance of the Fed’s 2% target.”