Employment figures in the U.S. saw a significant decline in October due to hurricanes and strikes, just days before a tightly contested presidential election, despite the unemployment rate holding steady at 4.1%. Only 12,000 jobs were added, far below the expected 110,000, marking the lowest increase since December 2020. The Department of Labor attributed disruptions in job estimates to the storms and noted manufacturing job losses from ongoing strikes, particularly at Boeing. The economic outlook may impact voter perceptions as election day approaches.
The employment figures in the United States were significantly impacted by strikes and hurricanes in October, which could have repercussions for the Democratic Party just four days before a tightly contested presidential election, even with an unemployment rate steady at 4.1%. Only 12,000 jobs were created in October, the smallest increase since December 2020, according to the Labor Department’s announcement on Friday. This figure falls far short of expectations, as analysts had projected 110,000 new jobs, according to Market Watch’s consensus.
“It is likely that employment estimates in certain sectors were disrupted by the hurricanes,” the department stated in its release. These statistics stem from two surveys conducted among households as well as businesses and agencies, both of which were likely affected by the severe damage caused by Hurricanes Hélène and Milton.
Additionally, the Labor Department pointed out that “employment has decreased in the manufacturing sector due to strikes,” particularly the one affecting Boeing that has been ongoing since September 13 and may conclude next week, as strikers are set to vote on a new improved offer from management on Monday. Both strikers and those on temporary layoff are counted as unemployed in the U.S. Moreover, job creation figures for August and September were revised downward to 78,000 and 223,000, respectively, resulting in a total of 112,000 jobs not created.
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“Wait”
With only four days remaining in a particularly heated and close contest between Kamala Harris and Donald Trump, it is certain that Trump will leverage these disappointing figures to criticize the Democrats’ economic management. Voters may also hold this against them. “This will likely weigh on how people perceive economic conditions,” Rubeela Farooqi mentioned to AFP, noting that “more broadly, households do not feel the benefits of a still-strong labor market and a low unemployment rate.”
In a statement, Joe Biden asserted that “job growth is expected to rebound in November as our recovery and rebuilding efforts continue post-hurricane.” He also commended the Boeing Machinists’ Union, which has been on strike since September 13, and is likely to vote in favor of the new proposal from the aerospace manufacturer on Monday.
The Democratic Party is struggling to convince voters of their economic achievements, overshadowed by years of inflation and high interest rates. The American dream of homeownership is now out of reach for many young families. “We will need to wait for the next report (…) before concluding anything on a radical change in the economy,” warned Carl Weinberg and Rubeela Farooqi, chief economists at High Frequency Economics.
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Severe Damage
The hurricanes Hélène and Milton, which struck the southeastern United States in late September and early October, inflicted severe damage and caused over 200 fatalities, halting a portion of economic activity in the affected areas. Aubrey Anderson is the CEO of the river recreation company Zen Tubing in North Carolina, a region particularly hard hit by Hurricane Hélène. “This is the first time that water has damaged the company’s infrastructure,” she noted, anticipating that her Asheville site would remain closed until 2025. This means she will only need half of the 100 employees she typically hires in the spring and summer.
The employment figures will also be closely monitored by the U.S. Federal Reserve, which is balancing interest rates to reduce inflation without triggering a spike in unemployment. However, the Fed will not rely solely on these numbers, as “it will consider all labor market data, which continues to trend toward a controlled decline in job creation and labor supply absorption,” said Lydia Boussour, an economist at EY. The Fed may announce a new rate decrease of a quarter percentage point during its upcoming meeting on November 6 and 7, which will occur the day after the