The U.S. Bureau of Labor Statistics reported a modest increase of 12,000 non-farm jobs for October 2024, a significant drop from the previous month's 254,000. The unemployment rate remained at 4.1%. The employment figures were notably lower than the anticipated 100,000 due to distortions caused by the Boeing strike and hurricane impacts, as well as lower institutional survey response rates.
Job gains in October were revised significantly, with September's numbers adjusted from an initial 254,000 to 223,000 and August's from 159,000 to 78,000. Manufacturing saw a decline of 46,000 jobs, predominantly in transportation equipment, reflecting the Boeing strike's effects. Temporary support services recorded a steep drop of 48,500 jobs, influenced by hurricane-related worker absenteeism. Other industries like leisure, hospitality, retail, transportation, and utilities also experienced negative job growth.
Health care and social assistance added 51,300 jobs, while the government sector saw an increase of 40,000 positions. Despite the stable unemployment rate, the actual number of unemployed rose slightly, with labor force participation dipping to 62.6%. The long-term unemployed increased to 1.84 million, while temporary layoffs slightly decreased to 850,000. The labor force participation rate drop was mainly due to a decline among the 25-54 age group.
Wage growth saw a minor rebound with an average hourly earnings increase of 0.37% month-over-month and 3.99% year-over-year. The average workweek remained steady at 34.3 hours. Despite expectations of Federal Reserve policy changes, U.S. 10-year Treasury yields stabilized around 4.3% post-report.
CME data suggests a high probability of the Federal Reserve cutting rates by 25 basis points in both November and December. The distorted employment data is not expected to significantly impact the Fed's upcoming meetings. U.S. stock indices saw slight increases, while the dollar index dipped to 103.7 before rebounding.
