October Jobs Report A Total Mess

Hurricanes & a Boeing strike distort jobs data

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The economy added just 12,000 jobs in October, according to today’s jobs report, but there are a few Category 5 caveats to consider.

The survey period for the payroll employment portion of the report coincided directly with Hurricane Milton. Not only did that potentially drive down survey response rates, but it also caused a lot of temporary job losses.

And beyond temporary employment loss, 512,000 employees kept their jobs but didn’t work due to bad weather. Any of those people who are paid hourly, and therefore didn’t earn any money, don’t count as employed for the period. For reference, just 15,000 employed people missed work due to weather last October.

On top of the storms, 41,000 workers were on strike during October, 38,000 of whom work in aerospace engineering (the Boeing strike).

The unemployment rate—which comes from a different, slightly less storm-affected survey—was unchanged at 4.1% for the month, but that hides a large decline in both employment and the labor force. If this reflects underlying economic dynamics, not great. If it reflects displacement from the hurricanes, well, also not great, but not as concerning from a long-term economic standpoint.

Given these distortions, I’m not sure it’s worth diving into the details (but will dip a toe in, anyway).

By Sector

Healthcare continues to add jobs at a blistering pace, tacking on another 52,000 in October. Governments added quite a few jobs for the month too, with most of that hiring at the state and local level.

Manufacturing lost jobs for the month but would have been roughly flat if not for the Boeing strike. Leisure and hospitality lost jobs too, but it’s important to note that many attractions in Florida, like Disney World, were temporarily closed during the survey period.

Healthcare and construction have added jobs at the fastest pace over the past year, with the latter staffing up at exactly twice the rate of the broader economy.

What Do we Take from This?

Not much. The economic waters are muddy. Things were fine before the storm, and our most real-time indicators (like claims for unemployment insurance) show that they’ve gotten back to fine as of the end of October. Sure, it’s possible that there was a sharp contraction in economic activity at the start of the month, but I’d assume the economy is still chugging along unless the November jobs report says otherwise.

What’s Next?

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