Although the non-farm employment data in October was "disappointing," it did not trigger panic about the job market. The current data may temporarily lose its reference value.
This period recorded employment data of 12,000 people, which was lower than the expected 113,000 and significantly below the previous value of 223,000. From the data, it essentially belongs to a big miss, but we note that it has not raised doubts about economic instability due to the abnormal employment data.
The core reason is that the unemployment rate remained at 4.1%. A short-term significant drop in employment did not lead to a surge in the unemployment rate, and the labor force participation rate did not decline. These two data points ensure the potential stability of the job market. Additionally, in October, due to the impact of hurricanes in the U.S., there was a significant short-term increase in initial jobless claims for that week, and this factor also affected non-farm employment data.
Regardless of whether the market believes the data is influenced by weather conditions, it is important to see whether the market accepts it. Currently, the pre-market reaction for U.S. stocks is relatively optimistic, and the current employment data is essentially "distorted," temporarily losing its reference value.
Of course, if next month's non-farm employment data still does not return to normal values, then consecutive low data could raise market concerns.
It is also worth noting that the previous value of non-farm employment data was revised down from originally 254,000 to 223,000, and the current published data is also lower than the market's original expectation of 113,000. Therefore, this data did not create a negative impact; instead, it further solidified the possibility that the Federal Reserve will continue to maintain the pace of interest rate cuts in November.
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