US job growth slows on hurricane impact, but negative revisions are the bigger worry
October numbers are well below expectations and the job growth trend has slowed to 2012 and 2019 levels.
Nonfarm payroll growth tumbled to just 12,000 for October, well below the 100,000 economists were anticipating.
We knew the hurricanes that ravaged the East Coast would have an impact on this report — we’d seen the fingerprints of these natural disasters all over the weekly initial jobless claims data — so there was always going to be extreme uncertainty on this particular month’s reading.
According to the BLS, 512,000 Americans in nonagricultural industries were unable to work in October because of bad weather, about 10x the historical norm for this month from 1995 through 2023.
But what’s much more concerning are the whopping -112,000 in negative revisions to the prior two reports. August job growth — first reported as +142,000 — is now down to 78,000, the worst reading since December 2020.
We’ve been a little whipsawed by US labor-market data lately, with jobs growth coming in below expectations in July and August only to crush estimates in September. Stepping back, the underlying trend in US job growth is clearly slower, and to a concerning degree. The six-month average — excluding this report — is now at 147,833.
That’s on par with levels we saw in 2019, when the Federal Reserve was cutting rates from a much lower starting point than at present, and in 2012, the worst stretch for job growth during the prepandemic economic expansion.
Bonds are rallying sharply, with 10-year Treasury yields down almost 10 basis points from pre-jobs levels.
