ISTANBUL

The US economy added only 12,000 jobs in October, much less than market estimates, according to figures released Friday by the Labor Department.

The market expectation for nonfarm payrolls was a gain of 106,000 jobs for the month, which saw two destructive hurricanes hit several states in the US as well as a large strike at aircraft maker Boeing.

Job additions for September were revised down by 31,000, from 254,000 to 223,000.

The unemployment rate remained unchanged at 4.1% in September, and came in line with market estimates.

The number of unemployed people was 6.4 million in October, while the labor force participation rate remained unchanged at 62.6% during that period.

The new figures come just days before next Tuesday's US presidential and congressional elections, with the economy a major issue for most voters.

Boeing strike hits manufacturing

The employment-population ratio, meanwhile, remained steady at 60.0% in October, compared to the month before.

In October, the number of people not in the labor force who currently want a job also stood unchanged at 4.6 million, the Labor Department said in a statement.

"These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs," it added.

In October, health care saw the biggest gain in jobs, with 52,000 added.

Employment in manufacturing, on the other hand, fell 46,000 – mostly due to the strike at aircraft manufacturer Boeing, according to the Labor Department.

In October, average hourly earnings for all employees on private non-farm payrolls rose 0.4% to $35.46 per hour, compared to September.

That figure showed an annual increase of 4% compared to the same month of 2023.

'Hurricanes lowered job growth'

President Joe Biden said devastation from Hurricanes Helene and Milton and new strike activity lowered job growth during the month of October.

He said job growth is expected to rebound in November as the administration's hurricane recovery and rebuilding efforts continue.

"America’s economy remains strong, with 16 million jobs created since I took office, including an average 180,000 jobs created each month over the last year—more than the year before the pandemic," he said in a statement released by the White House.

"We have the lowest average unemployment rate of any administration in 50 years, our economy has grown more than any presidential term this century, incomes are up $4,000 over prices, and inflation has fallen nearly to its 2% target," he added.

Biden said his administration is working every day to lower costs for working families on rent, prescription drugs, health insurance, and child care.

He argued that Congressional Republicans, on the other hand, are proposing a national sales tax that would cost families nearly $4,000 a year, hurt manufacturing, and cut hundreds of thousands of jobs.

"They are fighting for tax breaks for billionaires and big corporations—we are fighting to grow the middle class," he added.

'Fed expected continuing to cut rates at steady pace over next year'

Mike Fratantoni, Mortgage Bankers Association's (MBA) chief economist, said in a statement the report showed a notable slowdown in the labor market, noting job gains in government and health care sectors, but job losses in temporary help and manufacturing industries.

"While the unemployment rate was unchanged for the month at 4.1%, the household survey did show a 368,000 decrease in employment, with an estimate that more than 400,000 individuals left the labor force as job seekers pulled back from the market in the face of a slower pace of hiring across the country," he said.

"This continues a theme we have seen in recent months, where the labor market is not seeing large layoffs but instead an ongoing reduction in job openings and a reluctance by employers to add workers. That said, wage growth remained steady at a 4% annual rate," he added.

Fratantoni said MBA forecasts a slowdown in the pace of economic growth beginning in this quarter and extending through 2025, and it expects the Federal Reserve will respond by continuing to cut interest rates at a steady pace over the next year.

Longer-term rates, including mortgage rates, have largely priced in this expected path by the Fed, but today’s news is likely to bring mortgage rates somewhat lower as it adds more evidence that the economy is on a path to slower growth," he said.

'Job market remains rock-solid'

Mark Zandi, a chief economist at Moody’s Analytics, said the weak increase in October employment was as expected, weighed down by the temporary impact of the hurricanes and the Boeing strike.

"Response rates to the survey of businesses used to construct the job estimate were also extraordinarily low due to a very short collection period for the responses," he wrote on X.

"Abstracting from these one-offs, employment increased by close to 150k, about the same as the gains in recent months," he added.

Zandi noted that with unemployment rate remaining near to the low level of 4% and wage growth at 4%, "it is fair to say the job market remains rock-solid."