(Reuters) – U.S. job growth slowed sharply in October amid disruptions from hurricanes and strikes by aerospace factory workers, but the unemployment rate held steady at 4.1%, offering assurance that the labor market remained on solid footing ahead of Tuesday’s election.
Nonfarm payrolls increased by 12,000 jobs last month after surging by a downwardly revised 223,000 in September, the Labor Department said on Friday. Economists polled by Reuters had forecast payrolls rising 113,000.
MARKET REACTION:STOCKS: S&P 500 E-minis added to gains and were up 0.54%
BONDS: The yield on benchmark U.S. 10-year notesfell to 4.2425%, the two-year note yield fell to4.0897%FOREX: The dollar index turned 0.125% lower COMMENTS: BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
“The employment situation is opaque. The hurricane effects are hard to quantify, so most people will see these numbers and just ignore them. There were some significant revisions to previous months’ data, which should not be glossed over. The response rates are low and the error bands are large on these reports. The Fed will likely ignore this release and hopefully just stay the course they laid out in their last summary of economic projections, which would mean a 25 basis point cut in November and another in December.”
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT
“I don’t this it’s a compromise on the economy and we were expecting a weaker number, but not this weak. It’s again a combination of a slowing economy and the hurricanes and strikes. So, I’m not overly worried about what it’s going to mean for the equity market overall…We’re on track for another 25-basis points rate cut.”
BRYCE DOTY, SENIOR PORTFOLIO MANAGER, SIT INVESTMENT ADVISORS, MINNEAPOLIS
“This report dampens the enthusiasm from last month’s report. However, we are still expecting only a 25 bps cut by the Fed next week as the economy is still unlikely to go into a recession. The yield curve should steepen on this news, led by shorter maturity treasury yields coming back down.”
(Compiled by the Global Finance & Markets Breaking News team)
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