US employment data has been heavily impacted by October’s strikes and hurricanes, which could weigh on the Democratic camp four days before a particularly tight presidential election, despite a stable unemployment rate of 4.1%. Only 12,000 jobs were created in October, the lowest number since December 2020, the Department of Labor announced Friday. This is much lower than expected as analysts were counting on 110,000, according to the Market Watch consensus.
“Wage employment estimates in some sectors are likely to have been disrupted by the hurricanes”the ministry specifies in its press release. These data in fact come from two surveys, carried out among families, businesses and administrations, whose performance was undoubtedly influenced by the considerable damage caused by hurricanes Hélène and Milton.
Furthermore, the Department of Labor points out, “Employment fell in manufacturing due to strikes”in particular the one that has affected the aircraft manufacturer Boeing since September 13, but which could end next week, when on Monday the strikers will have to vote a priori in favor of the new improved offer proposed by the management. In the United States, strikers, but also people on technical unemployment, are counted as unemployed. Job creation for August and September was also revised downward, to 78,000 and 223,000 respectively, for a total of 112,000 jobs not created.
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«Wait»
Four days after the particularly tense and close duel between Kamala Harris and Donald Trump, there is no doubt that the latter will take advantage of these less positive data to denounce the economic mismanagement of the country by the Democrats. And the voters may be angry with them too. That “It will probably weigh on how people perceive economic conditions”Rubeela Farooqi told AFP, stressing that, “More generally, families are not feeling the benefits of a still strong labor market and a low unemployment rate”.
Joe Biden assured this in a press release “Job growth is expected to rebound in November as our post-hurricane recovery and rebuilding efforts continue.”. He also congratulated Boeing’s machinists’ union, which has been on strike since September 13, and is expected to vote in favor of the plane maker’s new offer on Monday.
The democratic camp is in fact struggling to convince voters of the good economic results obtained, overshadowed by several years of inflation and high interest rates. Even the American dream of owning a cottage is now out of reach for many young families. “We will have to wait for the next report (…) before we conclude anything about a radical change in the economy”warn Carl Weinberg and Rubeela Farooqi, chief economists at High Frequency Economics.
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Significant damage
Hurricanes Helen and Milton, which hit the southeastern United States in late September and early October, caused extensive damage and caused more than 200 deaths between them, halting some activity in the affected regions. Aubrey Anderson is CEO of river recreation company Zen Tubing in North Carolina, an area hit particularly hard by the devastation caused by Hurricane Helene. “It is the first time that water has damaged the company’s infrastructure”it said, anticipating that its Asheville site will remain closed in 2025. That means it will need, in the spring and summer, only half of the 100 employees it normally hires during this period.
The employment data will also be scrutinized by the US central bank, the Fed, which is manipulating rates to reduce inflation without causing a surge in unemployment. However, the Federal Reserve will not be satisfied with these figures and “will rely on all data from the labor market, which continues to trend towards a controlled decline in job creation and absorption of labor supply”estimates Lydia Boussour, an economist at EY. The Fed may announce another rate cut of a quarter of a percentage point at its next meeting on November 6-7. The day after the elections.
Time.news Interview: Understanding the Impact of Recent Economic Trends Before the Elections
Editor: Welcome to this special segment. Today, we’re diving deep into the latest U.S. employment data, which has seen some significant fluctuations recently due to strikes and natural disasters. Joining us is Rubeela Farooqi, an esteemed economist and expert on labor market trends. Rubeela, thank you for being here.
Rubeela Farooqi: Thank you for having me! It’s my pleasure to discuss such an important topic, especially with the elections around the corner.
Editor: Indeed, the timing couldn’t be more critical. We’ve seen that only 12,000 jobs were created in October, a stark contrast to the expected 110,000. What do you think is the primary driver behind this disappointing growth?
Rubeela Farooqi: Well, there are a couple of key factors at play. First off, the impact of hurricanes Hélène and Milton has undoubtedly disrupted output in various sectors, particularly in construction and support services. As the Department of Labor noted, the assessments come from surveys that were heavily influenced by these natural disasters. Secondly, we can’t underestimate the effect of the labor strikes, particularly with Boeing. The decline in employment figures can largely be attributed to reduced activity in manufacturing due to these strikes.
Editor: It sounds like a perfect storm of adverse events. How do you think these employment figures will influence voter sentiment just days before the presidential election?
Rubeela Farooqi: It’s likely to weigh heavily on perceptions of economic management by the current administration. As you mentioned, Donald Trump will likely leverage these figures to criticize the Democrats’ economic policies. While the unemployment rate remains stable at 4.1%, many families are feeling left behind and not reaping the benefits of a solid labor market. People tend to deem the economic situation more through their personal experiences rather than raw statistics.
Editor: You mentioned families feeling left behind—as we see price inflation and high interest rates continuing. How does this affect the average voter’s outlook on the economy?
Rubeela Farooqi: It can create a sense of economic frustration. Many people might look at the headlines boasting about low unemployment but feel the pinch at the grocery store or when trying to secure affordable housing. This disconnect may cause voters to hold the Democratic camp accountable for economic hardships, regardless of broader indicators.
Editor: President Biden expressed optimism about job growth rebounding in November, citing recovery and rebuilding efforts post-hurricane. Do you share that optimism?
Rubeela Farooqi: Optimism should be tempered with realism. Recovery efforts can indeed spur job creation, but we must wait for concrete data before jumping to conclusions. The next report will be crucial. Though there may be a temporary rebound, the long-term outlook depends on multiple external factors, including the resolution of strikes and the overall recovery from natural disasters.
Editor: So, if the December report shows improvement, how might that affect the political landscape?
Rubeela Farooqi: It could potentially shift the narrative for the Democratic camp, allowing them to showcase a recovery story as it unfolds. However, they will still have to contend with the preceding months of stagnation. Voters are likely to evaluate economic performance over a longer horizon, and the emotional weight of recent hardships won’t dissipate overnight.
Editor: That’s a valuable perspective. As we gear up for a critical election, there’s so much at stake. What advice would you give to voters as they contemplate these economic indicators?
Rubeela Farooqi: I’d urge voters to look beyond the headlines and consider their personal economic situations. Pay attention to local job markets, the cost of living, and how these factors impact their daily lives. Personal experience often outweighs national statistics when shaping one’s views on economic management.
Editor: Thank you, Rubeela, for your insights today. This gives our audience much to ponder in light of the upcoming elections.
Rubeela Farooqi: Thank you for having me—it’s crucial that we engage in these discussions as the political landscape evolves.
Editor: Absolutely. And for our viewers, we encourage you to stay informed and think critically about the issues at hand as we approach this pivotal moment in American democracy.