WASHINGTON -- The U.S. added a mere 12,000 jobs in October, a significant drop from September's gains of 254,000, as strikes and natural disasters threw the labor market off course. The Labor Department reported Friday that this marked the slowest month for job growth in nearly a year, largely impacted by a nationwide machinists' strike at Boeing and disruptions from Hurricanes Helene and Milton.
The strike at Boeing, which began in early October, has resulted in thousands of temporary furloughs across the aerospace giant and its supply chain. Although striking workers are ineligible for unemployment benefits, suppliers and local businesses reliant on Boeing have also had to reduce staff, compounding the layoffs seen nationwide. As a result, Washington state saw a sharp increase in jobless claims due to the strike's ripple effects.
Hurricanes Helene and Milton, which struck the Southeastern U.S. in late September and early October, respectively, led to widespread layoffs and an influx of new unemployment claims in impacted states, including Florida and the Carolinas. The storms interrupted local economies and intensified existing labor market strains, bringing jobless claims to 4.1% at 258,000 in early October -- the highest level in over a year.
Despite these shocks, Federal Reserve officials have signaled they will likely reduce interest rates by a quarter point in their upcoming November meeting. This decision follows the Fed's larger rate cut in September, aimed at softening the economic impact of prolonged high interest rates, which had previously been raised to curb inflation. Fed Chair Jerome Powell noted that inflation rates are nearing the central bank's 2% target, allowing the Fed to pivot towards supporting employment amid the ongoing market disruptions.
While the Fed's actions aim to stabilize the labor market and avoid recession, analysts warn that volatility may persist through the end of the year, especially as economic fallout from Boeing's strike and hurricane season play out. Job growth, which previously exceeded expectations, may not see a quick recovery as seasonal hiring for the holiday period could be constrained by these overlapping factors.