Topline

The U.S. labor market grew significantly less than expected in October, according to a government report released Friday morning that provides the last major update on the state of the American economy before Election Day.

Important facts

tangent

Bank of America economists Aditya Bhave and Shruti Mishra identified several events last month that may have temporarily reduced the size of the American workforce, including work stoppages due to severe weather events such as Hurricane Milton and labor strikes such as the Boeing factory workers' strike. According to Bank of America, these distortions led to at least 50,000 job losses last month. Additionally, Bank of America noted that the number of government jobs increased by 25,000 due to election workers. In Friday's news release, the government said it was “likely that payroll estimates in some industries were impacted by the hurricanes.”

Important background

The Nonfarm Payroll Report is the most widely cited publication examining the state of the labor market. It is a combination of monthly surveys conducted among households and employers and is subject to frequent revision as more data is received from previous months. The unemployment rate has risen markedly. Last October's 3.8% is an indication of tougher conditions for American workers and job seekers, but the unemployment rate remains well within normal historical ranges and is at its lowest level between 2000 and 2016.

How is the Biden-Harris job market?

The latest report before Tuesday's election shows the labor market results under President Joe Biden and Vice President Kamala Harris. From December 2020 to October, the number of nonfarm payrolls increased from 142.5 million to 159 million, an increase of about 12%, the unemployment rate fell from 6.7% to 4.1%, and the average hourly wage increased from $29.90 to $35.46, a jump of 18.6%. Although key labor market data is broadly positive, employment growth and the decline in unemployment at least partially reflect the recovery from the temporary shock of COVID-19 lockdowns, and wage growth is weighed down by the ongoing period of inflation in consumer price index rose from December 2020 to September this year by 20.1%.