October jobs gains marred by bad weather, strikes, and continued labor market cooldown

Halloween may be over, but the October jobs report is giving us a belated scare.

Employers added just 12,000 jobs in October according to the newest employment data from the Bureau of Labor Statistics, marking the lowest payroll gain since December 2020, when jobs declined by 140,000.

October’s low employment gain was partially impacted by the ongoing Boeing machinists strike and hurricanes Helene and Milton. But it also continues the trend of a continually cooling labor market.

“This report is full of all kinds of blips and problems and issues due to the storms and strikes, but it actually is consistent with the big picture and is a labor market that has been slowing and narrowing,” Julia Pollak, ZipRecruiter’s chief economist, told HR Brew.

Let’s take a closer look at those factors below.

Stagnant hiring. In addition to October’s weak job gains, payroll data for the prior two months was revised down by 81,000 to 78,000 jobs gains in August and down 31,000 to 223,000 in September. When compared to the monthly JOLTS data since the start of the year, hiring demand has largely stayed in line with job openings, suggesting employers aren’t growing their ranks but rather hiring to fill any attrition, experts told HR Brew.

“If you zoom out on that and think about the whole, you could conclude that labor demand is not actually accelerating or decelerating, it’s staying flat, and we’re filling against that demand over the course of the year,” Adam Stafford, CEO of recruitment marketing agency Recruitics, told HR Brew.

Manufacturing woes. Private sector employers lost a net 28,000 jobs in October. Transportation equipment manufacturing lost more than 44,000 jobs last month—the highest losses posted for any sector—largely owing to the ongoing Boeing machinists strike, which has seen more than 33,000 workers walk off the job since September.

The machinists are expected to vote on a new contract proposal on Monday, and if the strike ends soon it’s likely some of the losses in manufacturing will recover. Beyond the strike’s impact, though, manufacturing has suffered from ongoing job losses in recent years as businesses in the sector stagnated because of high interest rates. Should interest rates continue to fall, job gains could follow in the coming years as businesses start to grow again, Pollak said.

Weather uncertainty. In its report, the BLS also noted it was “likely that payroll employment estimates in some industries were affected by the hurricanes” that hit the southeast US in late September and early October. It also noted it’s “not possible to quantify the net effect on the over-the-month change in national employment, hours, or earnings estimates because the establishment survey is not designed to isolate effects from extreme weather events.”

State estimates for employment data in October are set to be released later this month. Until then, it’s difficult to estimate how much the hurricanes impacted the labor market, particularly because there were no pronounced job losses in sectors that would suffer from hurricane damage like hospitality, Pollak noted.

Zoom out. Stafford noted that some sectors more susceptible to government regulations—like oil and gas, or government and social assistance—may be holding off on hiring until after the election, at which point they may ramp up again.

“That, to me, is a signal that as we look ahead, in particular into 2025, we’re going to see investment really driven by corporate boards demanding growth from their management teams,” he said. “We’re going to see investment come off the sidelines, and we’re going to start to see those industries that are more susceptible to the political cycles, we’re going to see that come onto the table at that point [and] drive some growth in hiring.”

For employers in sectors that are already seeing job growth, now is a good time to capitalize on recruiting talent in industries where opportunity is scant, Pollak said. According to ZipRecruiter’s most recent job seeker confidence index, 34% of respondents said they’re applying to jobs outside of their field.

“This is a very exciting opportunity for HR folks in those sectors that are still [in] high demand for labor to appeal to nontraditional candidates,” Pollak said. “There is increasing supply in other sectors, where opportunities are dwindling, and many workers are feeling very frustrated they can’t find jobs, and they’re becoming increasingly open to considering jobs outside their field.”