Biden Can Blame Boeing For Massive Jobs Data Miss

Friday's jobs report showed that the U.S. economy added just 12,000 jobs in October, well below the estimates of 106,000 and the 223,000 jobs that were added in the previous month. But economist Joe Brusuelas says the weak number is in large part due to the Boeing Co BA machinist strike and labor interruptions from hurricanes Milton and Helene.

According to Brusuelas’ data, Boeing's strike caused the loss of roughly 40,000 jobs in the manufacturing space. Hurricanes Milton and Helene led to the temporary loss of thousands more jobs, helping explain the significant weakness of October's jobs report.

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Brusuelas, the principal & chief economist at RSM, argues that while the number may be alarming, it should not be interpreted as a sign of a dramatic slowdown in the labor market. Once the Boeing strike subsides and labor markets in hurricane-impacted regions are normalizing, job growth should be back in the 100,000-150,000 per month range, Brusuelas said in a Friday note.

"Those distortions will fade from the data over the next two months and should be interpreted as noise and not a deviation from the underlying trend in job growth that we think is roughly somewhere near 120,000 per month," Brusuelas said.

While October's jobs number may be an outlier, there has been a slowdown in the labor market, but one that is not as drastic as October's report would suggest. The unemployment rate has ticked higher from a low of 3.4% in April 2023 to more than 4% now.

Brusuelas argues that this slowdown isn't necessarily bad for the economy and could put the U.S. on track for more sustainable growth.

"While we would agree that hiring is slowing from the turbocharged early months as the economy emerged from the pandemic, we would make the case that it is slowing to a pace that is far more sustainable as the economy stands at full employment," Brusuelas wrote.

Keep Reading:

• US Economy Adds Only 12,000 Jobs In October, Sharply Misses Estimates As Hurricanes, Strikes Pummel Hiring

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