Friday, November 22, 2024

US election: Jobs growth slows sharply as polling day looms

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The 12,000 jobs added to payrolls is much lower than expected. Economists polled by Reuters had forecast payrolls rising by 113,000.

“At face value the 12k increase is obviously a weak number but it follows a very robust increase in September and was affected by strikes and possibly by the hurricanes,” said Brian Coulton, chief economist at Fitch Ratings.

Hurricane Helene devastated the south east of the US in late September, with Hurricane Milton hitting Florida a week later.

Despite the greater-than-expected slowdown, expectations remain that interest rates will be cut by 0.25% next week by the US central bank, the Federal Reserve.

“Markets can likely park the October jobs report to the side. Quite clearly, the hurricane has taken a heavy toll on the numbers, clouding the picture of labour market strength, and so should not impact the Fed’s policy rate path,” said Seema Shah, chief global strategist at Principal Asset Management.

And Lindsay Rosner from Goldman Sachs Asset Management said: “Stormy numbers but sky clearing for November 25 bp [base point] cut.

The Labor Department said it was likely the lower-than-expected jobs being added were affected by the hurricanes, but explained its survey was not designed to “isolate effects from extreme weather events” and that it was difficult to quantify the full impact.

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