U.S. Economy Uncertain Due to Job Market in Q4 2024

October was a treacherous month in the labor market. Strikes depressed manufacturing gin the aerospace industry, while the recent natural disasters lessened the period for payrolls making in nearly impossible to get a clear picture of the entire job force coming just weeks away from the presidential elections. Department of labor is monitoring the reports closely and on Friday, the last collection of economic data before Americans begin their voting spree.

Even with the elections heating up, the adverse is taking place in the labor market with new employments for August and September show to be down by an immense 112,000 jobs. With a consistent unemployment rate of 4.1% in October, studies show this is a results of more people leaving the labor market. Economists predict an additional interest rate cut after the FED meeting next week. With the results of the reports becoming irrelevant. Chris Rupkey, chief economist at FWDBONDS states, “this is not what was needed to answer if we were better off than four years ago.” 

Job Reductions Over Time

The U.S. economy added only 112,000 fewer jobs than was slated for August and September. Falling short of the originally predicted 113,000 for August and September 2024. Florida was also rocked with Hurricane Helene and Milton in consecutive weeks. The response rate of payrolls fell by 47.4% in October. Lowest returned results since January 1991, and lower than 69.2% for the past five years. 512,000 reported they were unable to work in October hitting record highs. 1.4 million people also reduced from full-time to part-time employment due inclement weather. Another all-time high when we reviewed next to last year at 129,000.

Bureau of Labor Statistics were unable to quantify the total effect of change in employment, hours, and earnings. This due to the survey not able to isolate effects from extreme weather. This also being due to the fact they were late sending and receiving responses. Attempting to crunch the results into the last 10 days in October.

Boeing machinists also played a role when actively striking, along with Textron aircraft company. This took away 44,000 jobs from the transportation equipment industry. Reason being individuals not receiving a paycheck are counted as unemployed. Economists are predicting the combination of storms, strikes, and short collection period took away 115,000 jobs from active payrolls. Hurricanes were estimated to have the largest effect than originally forecasted. Helene and Milton predicted to have blocked half a million people from work in October. Highest month of October since 1976 when the government started tracking.

Payrolls Are Sinking

In the month of October almost all the jobs added were in the healthcare and government spaces. Healthcare increased by 52,000 and was distributed across ambulatory and nursing facilities. Government payrolls had an overall increase of 40,000 stimulated by state and local government onboarding. The amazing opposite of this point is the amount of job and payroll reductions totaling 158,400 positions across the manufacturing, automobile, business services, help services, hospitality services, and retail industries. With hourly earnings dropping from 0.4% to 0.3% was most likely incurred by the reduction of hour paid workers removed from payroll calculations.

With the unemployment rate growing 0.5% in July from March, the FED was forced to reduce the interest and cut the largest amount since 2020. FED cuts are slated to hit 4.75-5% range after exploding by 525 points from 2022 to 2023. 220,000 people left the labor market in in Octobe4 2024, essentially offsetting the growth to 368,000. We saw the largest amounts of layoffs since 2021, but a shorter time of unemployment due to people working part-time positions. We are seeing the labor market begin to freeze over which results in a justifiable excuse for cutting rates. Where this labor market will end up is anyone’s guess and we must stay vigilant in the pursuit to continue to increase the hiring rate and turn around a gloomy situation for many in the industries effected by this time of uncertainty (FED).

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