Hurricanes Helene and Milton significantly disrupted the U.S. economy in October, causing job creation to drop to its lowest point in more than three years. In total, U.S. employers managed to add 12,000 jobs in October, a significant decrease from the 223,000 jobs added in September. These are the lowest figures since December 2020, according to the Bureau of Labor Statistics' report on Friday. This fell massively short of the anticipated addition of 110,000 jobs that economists surveyed by Dow Jones Newswires and The Wall Street Journal had predicted.
While the unemployment rate remained stable at 4.1%, the extensive job creation slowdown does not indicate an economic crisis. Economic analysts had anticipated a temporary slump in job creation due to late September and October's hurricanes, coupled with a strike at Boeing. These events temporarily put many workers out of employment. However, the bureau could not definitively quantify how significantly the hurricanes affected the figures.
An estimated 40,000 jobs were lost due to each the hurricanes and the strike, suggests economics professor, Justin Wolfers from the University of Michigan. His analysis is that while the job growth rate may have slowed, it remains reasonable. However, revisions in job growth figures for September and August by a total of 112,000 indicate a genuine slowdown in the job market.
The Federal Reserve is likely to take these indications seriously as they plan to meet next week to determine the central bank's fed funds rate, which influences various loan costs. The Fed had previously lowered the rate from a twenty-year peak at their last meeting in September in a bid to stimulate the economy and prevent a drastic rise in unemployment. Slower job growth rates may force the Fed to consider additional rate reductions in the upcoming months. The financial markets currently anticipate a 0.25 percentage point cut from the Fed's interest rate next week.
A correction to a previous version of this story was made on Nov. 1, 2024, to clarify that financial markets expect a 0.25 percentage point cut by the Federal Reserve to its interest rate.