US election: Jobs growth slows sharply as polling day looms

The 12,000 jobs added to payrolls is much lower than expected. Economists polled by Reuters had forecast payrolls rising by 113,000.

But workers staging walkouts were not included in last month’s jobs data, which contributed to the overall non-farm payrolls being lower.

“At face value the 12k increase is obviously a weak number but it follows a very robust increase in September and was affected by strikes and possibly by the hurricanes,” said Brian Coulton, chief economist at Fitch Ratings.

Hurricane Helene devastated the south east of the US in late September, with Hurricane Milton hitting Florida a week later. A total of 512,000 people said they could not go to work because of extreme weather.

Despite the greater-than-expected slowdown, expectations remain that interest rates will be cut by 0.25 percentage points next week by the US central bank, the Federal Reserve.

“Markets can likely park the October jobs report to the side. Quite clearly, the hurricane has taken a heavy toll on the numbers, clouding the picture of labour market strength, and so should not impact the Fed’s policy rate path,” said Seema Shah, chief global strategist at Principal Asset Management.

Lindsay Rosner from Goldman Sachs Asset Management added: “Stormy numbers but sky clearing for November 25 bp [base point] cut.”

The Labor Department said it was likely the lower-than-expected jobs added were affected by the hurricanes because its survey is not designed to “isolate effects from extreme weather events”, adding it was difficult to quantify the full impact.

Over the past year, job growth has also slowed and the unemployment rate has been edging higher, though it remains at historically low levels. Average hourly earnings have increased 4% in the last 12 months.

Last month the US Fed cut interest rates by a bigger-than-usual 0.5 percentage points, saying it wanted to avoid any further weakening in the labour market.