employment penalized by strikes and hurricanes, four days before the presidential election

Employment figures in the United States were heavily penalized by strikes and hurricanes in October, which could weigh on the Democratic camp four days before a particularly close presidential election, despite an unemployment rate stable at 4, 1%. In October, only 12,000 jobs were created, the lowest number since December 2020, the Labor Department announced Friday. This is much less than expected since analysts were counting on 110,000, according to the Market Watch consensus.

“It is likely that wage employment estimates in some sectors were disrupted by the hurricanes”details the ministry in its press release. These figures in fact come from two surveys, carried out among households and businesses and administrations, the progress of which was undoubtedly affected by the significant damage caused by hurricanes Hélène and Milton.

In addition, underlines the Department of Labor, “employment declined in the manufacturing sector due to strikes”notably that which has affected the aircraft manufacturer Boeing since September 13, but could end next week, with the strikers having to vote on Monday, a priori in favor of the new improved offer proposed by management. Strikers, but also people on technical unemployment, are counted in the United States as being unemployed. Job creations for August and September were also revised downwards, to 78,000 and 223,000 respectively, which represents a total of 112,000 jobs ultimately not created.

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«To wait for»

Four days before a particularly tense and close duel between Kamala Harris and Donald Trump, there is no doubt that the latter will take advantage of these less good figures to point out the economic mismanagement of the country by the Democrats. And voters could also hold it against them. That “will likely weigh on how people perceive economic conditions”Rubeela Farooqi told AFP, noting that, “more generally, households are not feeling the benefits of a still strong labor market and a low unemployment rate”.

Joe Biden assured in a press release that “Job growth is expected to rebound in November as our hurricane recovery and rebuilding efforts continue”. He also congratulated the Boeing machinists' union, on strike since September 13, and which is expected to vote on Monday in favor of the new offer proposed by the aircraft manufacturer.

The Democratic camp is indeed struggling to convince voters of their good economic results, these being overshadowed by several years of inflation and high interest rates. Even the American dream of owning a cottage is now out of reach for many young families. “We will have to wait for the next report (…) before concluding anything on a radical change in the economy”warn Carl Weinberg and Rubeela Farooqi, chief economists for High Frequency Economics.

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Significant damage

Hurricanes Helen and Milton, which hit the southeastern United States at the end of September and beginning of October, caused significant damage and caused a total of more than 200 deaths, shutting down part of the activity in the affected regions. Aubrey Anderson is CEO of river recreation company Zen Tubing in North Carolina, an area particularly hard hit by the devastation caused by Hurricane Helene. “This is the first time that water has damaged the company's infrastructure”it said, anticipating that its Asheville site will remain closed in 2025. This means that it will only need, in the spring and summer, half of the 100 employees it usually hires. at this period.

Employment figures will also be scrutinized by the American central bank, the Fed, which is juggling rates to bring down inflation without causing a surge in unemployment. However, the Federal Reserve will not be satisfied with these figures and “will rely on all labor market data, which continues to trend towards a controlled decline in job creation and absorption of labor supply”estimates Lydia Boussour, economist at EY. The Fed could announce another quarter percentage point rate cut during its next meeting on November 6-7. The day after the election.