The Bureau of Labor Statistics will release its latest nonfarm payrolls report just four days before the 2024 U.S. election, in which voters’ views on the economy play a key role.
However, this non-farm payrolls data may be the most distorted in years. Due to the impact of hurricanes and worker strikes, US job growth in October was temporarily suppressed. Just when voters, politicians and Federal Reserve officials hope to have a clearer understanding of the economy, they will get a vague data instead.
Trump and his supporters have repeatedly blamed the Biden-Harris administration for high inflation that peaked two years ago. Despite strong job growth, few layoffs and low unemployment, Trump has declared the United States a "failed nation" and vowed to impose sweeping tariffs on all imports to restore millions of manufacturing jobs.
Normally, the nonfarm payrolls report helps clarify the state of the economy. But economists estimate that the lingering impact of Hurricanes Helene and Milton and a Boeing machinist strike may have reduced the number of new nonfarm payrolls last month by about 60,000 to 100,000, most of which were temporary.
Overall, economists estimate that Friday's report will show just 113,000 new nonfarm payrolls in October, which, while respectable, is less than half of the unexpectedly strong 254,000 gain in September, and the unemployment rate is expected to remain low at 4.1%. After accounting for the impact of hurricanes and strikes, the data still suggests a strong job market, with healthy consumer spending providing strong support for the economy amid high interest rates.
“This is an extremely resilient economy,” said Jane Oates, a former Labor Department official during the Obama administration. “People are spending, and that’s what’s holding the economy back.”
However, some other effects may be difficult for the government to measure. For example, the Labor Department believes that a strike by Boeing machinists and a smaller strike by some hotel workers subtracted 41,000 jobs from October's job growth. However, as the strike hurt Boeing's sales, some of its suppliers may have also cut jobs. The impact of these job losses on October's employment data is unclear.
At the same time, the hurricane may have caused fewer job losses than economists expected. A worker must go without pay for a full pay period, usually two weeks, to be considered unemployed in government data. While many workers in North Carolina may have been out of work that long, Florida has more experience dealing with hurricanes and employees may not be out of work for as long because of the hurricane, Oates said.
UBS economists noted that Orlando's major theme parks - Disneyland, SeaWorld and Universal Studios - were closed for just two days after Hurricane Milton hit, and in some states people will be hired to clean up and rebuild.
Friday’s nonfarm payrolls report will be the last major economic data before the Federal Reserve’s November meeting, and comes just four days before Election Day. Most economists expect the Fed to make another small 25 basis point rate cut after a sharp 50 basis point cut in September.
If the jobs report shows that job growth remained healthy in October despite the impact of hurricanes and strikes, Republican politicians may again question its credibility. Last month, when the government reported an unexpected increase in employment in September, Republican Senator Marco Rubio of Florida accused the report of being "fake."
However, mainstream economists do not share this skepticism, as other indicators such as initial jobless claims also show that the job market remains solid.
“I’m shocked at how hard politicians have pushed this point,” said Julia Pollak, chief economist at ZipRecruiter, who considers the Bureau of Labor Statistics, which publishes the nonfarm payrolls report, “the most transparent government agency in the world.”
Trump and his critics have seized on the revisions to the initial nonfarm payrolls estimate, claiming the Biden-Harris administration had doctored the data. In August, the Bureau of Labor Statistics said it expected total U.S. payrolls for March to be revised down by 818,000, or about 0.5% of the total. During the September presidential debate, Trump claimed the revision reflected "fraud" in the jobs data. Yet during his own administration, the BLS also revised down payrolls by 514,000 in 2019.
Erica Groshen, a senior economic adviser at Cornell University and former director of the Bureau of Labor Statistics, explained that this revision is "not a bug, but a feature" and reflects the government's data collection mechanism. "The Bureau of Labor Statistics wants to release information as timely as possible, but also wants the data to be as accurate as possible," Groshen said. To this end, the Bureau of Labor Statistics releases early data based on surveys of tens of thousands of companies, and then makes revisions based on actual employment data from more companies and unemployment benefit agencies.
Trump's running mate, Senator JD Vance, has often challenged employment data by claiming that all new jobs in the past year went to immigrants. This claim is based on the fact that the Bureau of Labor Statistics' "foreign-born" group increased by 1.2 million in September from the previous year, while employment for native-born workers decreased by about 800,000. However, the "foreign-born" category includes people who have lived in the United States since childhood and have become citizens, as well as recent legal and illegal immigrants.
What’s more, native-born Americans are retiring in large numbers, one reason many employers often have trouble filling jobs. As large numbers of baby boomers age, the share of the U.S. population aged 65 and over has jumped to 17.3% from 13.1% in 2010. And the unemployment rate for native-born Americans, at 3.8%, is actually lower than the 4.2% for foreign-born workers.
Article forwarded from: Jinshi Data