The U.S. labor market saw a significant slowdown in October, with nonfarm payrolls increasing by just 12,000 positions, representing the weakest growth since December 2020, according to the department’s latest data. Bureau of Labor Statistics.

The unemployment rate remained stable at 4.1%, with the number of jobless Americans remaining relatively constant at 7 million. However, these figures reflect an increase in unemployment compared to the same period last year: 3.8%.

The October employment summary not only revealed sluggish employment growth, but also included significant downward revisions for previous months. August’s job gains were adjusted to 78,000, and the initial September estimate was reduced to 223,000. These revisions collectively decreased the previously reported job creation numbers by 112,000.

Employment in the health care and government sectors, which are generally bright spots for the economy, continued to increase in October. Health care added 52,000 jobs, an average monthly increase of 58,000 over the past year. Additionally, public employment also followed its upward trend, with an increase of 40,000 positions, close to the average monthly gain of 43,000 over the previous 12 months.

In the professional and business services sector, temporary help services saw a significant drop of 49,000 jobs. Since peaking in March 2022, employment in temporary help services has decreased by 577,000.

Additionally, manufacturing employment declined by 46,000 jobs last month, primarily due to a decrease of 44,000 positions in transportation equipment manufacturing, largely attributed to strikes, the BLS noted.

In a speech in mid-October, Federal Reserve Governor Christopher Waller discussed the potential impact of recent events on the October jobs report. He highlighted that two major factors…recent hurricanes and the Boeing strike…would have a significant impact on employment figures.

Waller estimated that these events could reduce job growth by more than 100,000 positions for the month. He stressed, however, that this substantial drop in employment would likely be “temporary” rather than indicative of a lasting trend in the labor market.

Boeing strike

When the Department of Labor conducted its household and establishment surveys, approximately 44,000 American workers were on strike. The majority of these strikers – approximately 33,000 – were Boeing machinists who began their work stoppage on September 13. It was their first strike since 2008, following a decisive vote against a union-approved labor contract.

The strikers are ready to vote on a new contract proposal Monday. This improved offer includes a 38% salary increase over a four-year period and an enhanced signing bonus. The union approved the proposal, informing its members that it has negotiated the best possible terms with Boeing. Union leaders said they had reached the limit of concessions they could obtain from the plane maker, Reuters reported.

However, Boeing’s influence on US employment figures is expected to persist. Kelly Ortberg, CEO recently announced plans to reduce the company’s global workforce by 10%, which equates to 17,000 positions.

Ortberg, who took over as CEO in early August, stressed the need for Boeing to streamline operations and focus on its core businesses.

“One of the things I’ve heard from a lot of employees is that there’s just too much overhead. It prevents them from doing their job,” he told investors during a third-quarter earnings conference call. “So we’re really going to focus this downsizing on streamlining those general operations, consolidating the things that can be consolidated.”

Hurricanes Helene and Milton

The October data from the Labor Department’s surveys is the first collection since hurricanes Helene and Milton struck the United States, causing significant damage in the Southeast.

Economic analysts anticipate labor market challengesincluding job losses and market distortions due to storms. Areas directly affected by hurricanes are expected to see a sharp increase in unemployment as businesses temporarily cease operations due to physical damage or infrastructure failure.

Major disasters can have a profound impact on the labor market, causing immediate unemployment, interrupting normal business activities, and leading to widespread economic slowdown across various sectors. Recovery from such devastating events typically requires a substantial investment of financial resources and time.