U.S. Job Growth Slows Sharply in October—Only 12,000 Jobs Added!

October Non-Farm Payrolls Report: Key Insights and Analysis

The U.S. economy added a mere 12,000 jobs in October 2024, significantly missing expectations of a 100,000 increase, according to the Bureau of Labor Statistics (BLS). The unemployment rate remained steady at 4.1%, consistent with the prior month but higher than the 3.8% recorded a year ago. This latest employment report reflects a slowing labor market, influenced by strike actions and natural disasters, creating a mix of limited growth sectors and job declines in others.

Employment Growth Lags Amid Weak October Gains

• Actual vs. Expected Job Growth: The October addition of 12,000 jobs fell well short of the Dow Jones forecast of 100,000, underscoring the growing economic pressures. Recent hurricanes, labor strikes, and diminished hiring demand, particularly in temporary staffing, have dampened job creation.
• Strikes and Sectoral Impacts: Manufacturing saw a notable decline, losing 46,000 jobs largely due to a significant strike in the transportation equipment sector, accounting for a 44,000 job loss. This sectoral downturn weighed heavily on total job figures, alongside a significant 49,000 decline in temporary help services employment.

Steady Sectors and Positive Gains

Despite the broader slowdown, some sectors managed modest growth:

• Healthcare and Government Hiring: Health care employment rose by 52,000, driven by hiring in ambulatory services and nursing facilities. Government employment also grew by 40,000, with state-level hiring contributing significantly to this increase.
• Wages and Workweek Stability: Average hourly earnings increased by 0.4% month-over-month, reaching $35.46, while the year-over-year growth held at 4.0%. The average workweek remained stable at 34.3 hours, indicating stable job conditions for those employed but reflecting the overall tightness in new hiring.

Unemployment and Participation: Limited Movement

• Unemployment Rate and Demographic Stability: The unemployment rate stayed at 4.1%, with little movement among major demographic groups. Adult unemployment rates (3.9% for men and 3.6% for women) and rates for racial groups such as Black (5.7%) and Hispanic (5.1%) workers remained unchanged.
• Labor Force Participation: Participation held at 62.6%, showing no major change in October and reflecting a stagnant employment-population ratio of 60.0%. This lack of fluctuation aligns with a lower inclination for labor force re-entry amid a cooling job market.

Revisions to Prior Months

August and September employment figures were revised down, reducing gains by a combined 112,000 jobs, highlighting a more tempered labor market than previously estimated.

Economic Outlook: Cautionary, Potentially Bearish

Given these conditions, the October payroll report points to a weakening labor market, reflecting both sector-specific disruptions and broader economic caution. With strikes affecting key industries and hiring cooling, the overall outlook remains cautious, potentially bearish, as job growth lags expectations and consumer-facing sectors see slower recovery.