The upcoming jobs report is poised to register a marked decline in hiring, as estimates suggest that October will post the least job growth in close to four years. Non-farm employment increased by a meager 100,000-thats the projections from economists polled by Dow Jones for the Bureau of Labor Statistics. This estimate factors in the effects of Hurricanes Helene and Milton and a major walk out at Boeing, all of which could serve to deflate the payroll numbers should this forecasting come to fruition, it would represent the lowest net job change counted since the end of December 2020 and sharp plunge from the previous months upsurge of 254,000 new jobs created.
The report, which will be published is believed to maintain the jobless rate at 4.1%. Michael Arone, Chief Investment Strategist at State Street Global Advisors pointed out that if this was achieved, considering the numbers, there is a flat unemployment rate and wage growth outpaces inflation, it would show that the US economy is very strong. But they expect this increase to be only by 0.3% and this to remain at 4% same as the picture for September suggesting inflation persists but does not quicken in pace.
Year over year, cuts to new hiring activities are to be expected but the fundamental outlook on the economy is believed to be intact. “The top-line numbers will be a little bit noisy, but I think there’ll be enough there to continue to determine that the soft landing is intact,” noted Arone. Hurricanes Helene and Milton are likely to have weighed heavily on the economy with Helene alone being projected by Goldman Sachs to have led to the loss of an estimated 50,000 jobs. The current ongoing strike at Boeing which has affected 33,000 employees is also likely to worsen payrolls by an approximate 41 thousand more.
Nonetheless, the trend on the indicators prior to this report points towards healthy filling of positions with no massive layoffs. For example, according to ADP, private sector employment increased by 233,000 in October, well over the forecast. Similarly, jobless claims for the first time fell to 216000, the same figure as the lowest level recorded in close to late April. Still, the White House has warned that these occurrences may, in the end, aggregate in a negative impact on payrolls of 100,000, rendering this month’s report rather difficult to dissect.
It has been asserted that job creation has slowed down across most jobs after the pandemic, with government, healthcare, and leisure and hospitality still leading the job additions. According to Julia Pollak, the Chief Economist at ZipRecruiter, it may be an understanding of the extent of growth in these areas that necessitates some rate tamed cuts by the Federal Reserve in order to support the labor market and redress the skew to the job seekers.