U.S. adds only 12,000 jobs in October, compared to 165,000 same period last year

The United States Department of Labour Statistics indicated that employers added only 12,000 jobs in October, as hiring slowed substantially, compared to 165,000 in the same period last year.

This makes it approximately a 92.73% decrease, a significant decline, quite unlike 105,000 jobs in October which Economists had estimated.

These figures were far lower than expected and job gains for previous months were sharply revised downward, raising concerns about a weakening labour market.

Also, according to Goldman Sachs, the flow of immigrants supporting labour force growth has been slowing.

Weakening labour market

The labour market has been weakening as payroll gains for August and September were revised down by a massive 112,000. August’s figures were downgraded from 159,000 to 78,000 and September’s from 254,000 to 223,000.

Across the region, the number of businesses open, employees working, and hours logged all fell by about 9%, according to Homebase, which makes employee scheduling software.

An ongoing Boeing strike, along with smaller walkouts at Textron, an aerospace parts maker, and Hilton Hotels, likely reduced payrolls by around 40,000, according to research firm Nomura. Overall, forecasters estimate that the storms and strikes shaved job gains by approximately 100,000.

The state of the U.S job market 

Overall, job growth has remained robust despite high interest rates and inflation, with strong wage gains driving consumption, according to the report.

Additionally, the government and healthcare sectors, which have significantly contributed to U.S. job growth in recent months, have now increased payrolls to levels that would have been expected if the pandemic had not occurred. Consequently, these sectors are now adding jobs, but at a slower rate.

The expected outcome is a significant slowdown in job creation into the next year, which should help keep inflation under control while avoiding a recession.

Employment growth across sectors 

The healthcare sector recorded fewer jobs with 52,000, while the government added 40,000.

Professional and business services lost 47,000 because of a decline in temporary staffing positions. Manufacturing lost 46,000 jobs, largely because of the Boeing strike. Leisure hospitality and construction were virtually flat amid the storms.

Overall, jobs were shed in other sectors while a few were added.