WASHINGTON (AP) — On Friday, Americans will get their last substantial glimpse into the state of the U.S. economy – the October jobs report – just four days before Election Day. However, this view is likely to be clouded by the impact of strikes and hurricanes, which have temporarily left many workers off the payroll.
The Labor Department is expected to report that employers added nearly 118,000 jobs last month, according to forecasters surveyed by data firm FactSet. That would be a decent, if hardly spectacular, win. But it would be a significant decline from the stronger-than-expected 254,000 jobs the economy added in September.
But economists have warned that hurricanes Helene and Milton, coupled with ongoing strikes, including one by machinists at Boeing, led to a decline in net job growth in October. Lydia Boussour, senior economist at tax and advisory firm EY, said she expected the government to create just 70,000 jobs in October. According to their calculations, last month’s hurricanes and strikes combined have eliminated up to 111,000 jobs from payrolls.
“October’s jobs report will be unclear,” Boussour wrote in a commentary. “We think the actual pace of job growth in October was probably around 170,000.” At the same time, the unemployment rate is expected to remain at a low 4.1%, according to the FactSet survey.
In any case, numbers like these reflect a robust labor market – not quite as strong as at the beginning of the year, but still solid and stable. Combined with an inflation rate that has fallen from its peak in 2022 to near pre-pandemic levels, the overall economy appears to be on solid footing on the eve of Election Day.
Economists have also noted that the United States is the strongest of the world’s most advanced economies and has proven surprisingly sturdy despite the pressures of high interest rates. This week, for example, the government estimated that the economy grew at a robust annual rate of 2.8% in the most recent quarter, with consumer spending – the heart of the economy – fueling growth.
But as voters decide between former President Donald Trump and Vice President Kamala Harris, scores of Americans have said they are dissatisfied with the state of the economy. Despite the collapse in inflation, many people are upset about high prices, which have skyrocketed during the recovery from the pandemic recession and are still about 20% higher on average than before inflation began accelerating in early 2021.
The lack of clarity in October’s jobs data could lead some Republican politicians to again question the credibility of the government’s jobs numbers, especially if they come in stronger than economists expected. For example, Sen. Marco Rubio, a Republican from Florida who was once a Trump critic turned unabashed supporter, has baselessly claimed that September’s surprisingly robust jobs report was “fake.”
But no mainstream economist shares such skepticism. Other economic barometers such as the number of applicants for unemployment benefits – data that is primarily collected by the states – also indicate that the labor market remains solid.
With inflation having cooled significantly, the Federal Reserve will cut its key interest rate for the second time next week and probably again in December. The Fed’s 11 rate hikes in 2022 and 2023 were able to assist curb inflation without plunging the economy into recession. A series of Fed rate cuts is expected to result in lower borrowing rates for consumers and businesses over time.
There are now signs of a slowdown in the labor market. This week, the Labor Department reported that employers posted 7.4 million job openings in September. Although that is still more than employers reported on the eve of the 2020 pandemic, it was the fewest vacancies since January 2021.
And 3.1 million Americans quit their jobs in September, the fewest in more than four years. A decline in resignations tends to indicate that more workers are losing confidence in their ability to find a better job elsewhere.
