Hurricanes and Labor Strike Disrupt U.S. Job Market in October

U.S. employers kept their payrolls essentially unchanged in October and the unemployment rate held steady. The data, which is based on statistics from two monthly surveys taken in September and October, was impacted by two hurricanes and a labor strike at Boeing. However, the effects from those disruptions should be temporary.

Employers added roughly 12,000 workers to payrolls in October 2024, according to a survey of businesses by the Bureau of Labor Statistics. Those additions came in well below the 223,000 jobs gained in September (which was revised down) and were well below what economists were forecasting (+100,000 jobs to +110,000 jobs). Still, the U.S. economy has now added jobs for 46 consecutive months, the fourth-longest period of job base expansion on record dating back to 1939.

Of note, the job counts for both September and October were revised down. Downward revisions to August 2024 data showed 81,000 fewer jobs were added than previously reported, down to 78,000 positions. The September 2024 job growth number was revised down by 31,000 jobs to a total of 223,000 positions. With these revisions, employment gains in August and September combined were 112,000 jobs lower than previously reported.

Job gains in October were lower than the monthly average of around 194,000 jobs added over the previous 12 months and came in well below pre-pandemic norms. From 2015 to 2019, the U.S. economy added an average of roughly 190,000 jobs each month.

On an annual basis, the nation gained roughly 2.17 million jobs as of October 2024. That was the weakest annual gain since March 2021 and registered below the pre-pandemic average of around 2.4 million jobs added annually from 2015 to 2019.

The U.S. economy has recovered all the net jobs lost during the COVID-19 pandemic. As of October, the nation had nearly 6.7 million more jobs (+4.4%) compared to the pre-pandemic employment level from February 2020.

Jobs by Industry

A little more than half of the 11 major industry sectors gained jobs in October. The most notable job base expansions were in Education and Health Services (+57,000 jobs) and Government (+40,000 jobs). Much smaller gains were recorded in Construction (+8,000 jobs), Information (+3,000 jobs), Other Services (+1,000 jobs) and Mining and Logging (+1,000 jobs). On the other hand, steep job cuts were seen in Professional and Business Services (-47,000 jobs), plus Manufacturing (-46,000 jobs) which was impacted by the machinists’ strike at Boeing that has idled more than 40,000 workers. Milder declines occurred in Leisure and Hospitality Services (-4,000 jobs) and Trade, Transportation and Utilities (-1,000 jobs). Essentially no change was recorded in the Financial Activities segment.

Most major industries have recovered all the jobs lost during the COVID-19 pandemic downturn. Education and Health Services has seen the best recovery, with the October 2024 job count coming in roughly 2 million positions ahead of February 2020 numbers, followed by Professional and Business Services (+1.44 million jobs). Also well ahead of pre-pandemic norms was Trade, Transportation and Utilities (+1.34 million jobs).

The Leisure and Hospitality Services sector, which was the hardest-hit industry during the pandemic, has recouped all the jobs lost during that downturn. As of October, that sector had 90,000 more jobs than in February 2020, but that was just a 0.5% increase in the job base.

The Mining and Logging and Other Services sectors have yet to recover all the jobs lost during the COVID-19 downturn. The Mining and Logging industry was 46,000 jobs below its February 2020 level, while Other Services was 15,000 jobs in the hole as of October 2024. That put the October employment count in Other Services 0.3% below the pre-pandemic level, while the job base in Mining and Logging was 6.7% below the February 2020 level.

Unemployment

The unemployment rate (U3 or headline unemployment rate, which is seasonally adjusted, and is a survey of households) remained unchanged at 4.1% in October after falling the previous two months. It’s worth noting that the unemployment rate is less subject to temporary distortions than payroll employment. While the recent unemployment rate was slightly higher than the previous 12-month average of 3.9%, it was in line with economists’ expectations. The unchanged unemployment rate came amid a labor force participation rate that declined 10 basis points between September and October to 62.6%, as 220,000 people exited the labor force. 

The unemployment rate registered below 4% from February 2022 to April 2024, averaging 3.6% during that period. At the onset of the pandemic, the unemployment rate climbed to 14.8% in April 2020. Prior to the pandemic, the unemployment rate clocked in at 3.5% to 5.7% from 2015 to 2019, averaging 4.4% during that five-year period. Prior to 2023, the unemployment rate hadn’t registered below 3.5% since 1969.

The total number of unemployed persons in the U.S. registered at roughly 6.98 million in October, up from about 6.83 million in September.

The unemployment rate for adult men (20 years and over) rose 20 bps from September to October, registering at 3.9%. The unemployment rate for adult women (20 years and older) was unchanged month-over-month at 3.6%. Meanwhile, the unemployment rate for teenagers (16 to 19-year-olds) declined 50 bps, from 14.3% in September to 13.8% in October.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.13 (+0.4%) from September to October. That monthly increase took average hourly earnings to $35.46 in October. On an annual basis, average hourly earnings were up $1.36, a 4% increase year-over-year. Overall wage growth continues to surpass rising prices, as the Consumer Price Index rose 2.4% annually in September. The Fed’s target for inflation is currently at 2%.

Wage growth over the past year was strong across most major industries. The largest increases in earnings from October 2023 to October 2024 were recorded among workers in Information (5.1%), Professional and Business Services (5.1%), Manufacturing (4.8%), Construction (4.6%) and Financial Activities (4.4%). Smaller increases were among employees in Education and Health Services (2.9%), Trade, Transportation and Utilities (3.1%), Mining and Logging (3.5%), Leisure and Hospitality Services (3.6%) and Other Services (3.6%).