US Jobs Market Sees Shocking Shift: Lowest Unemployment Rate in 4 Years on the Eve of Presidential Election

[한국경제TV 김종학 기자]

Last month, job growth in the United States hit its lowest level in four years. Due to concerns about the deterioration of the job market, U.S. Treasury yields fell significantly after the index was released.

On the 1st (local time), the U.S. Department of Labor’s Bureau of Labor Statistics announced that non-farm jobs increased by 12,000 in October. This is significantly lower than the Wall Street consensus of 100,000 predicted by Dow Jones and the lowest level since December 2020 during the pandemic.

This report also reflects significant revisions to the jobs held in August and September. Non-agricultural jobs were 78,000 in August and 223,000 in September, a decrease of 112,000 jobs over the two months compared to the initial announcement.

Although non-farm jobs have decreased significantly, the unemployment rate was 4.1% last month. On the surface, it was flat compared to the previous month, but detailed indicators below the decimal point showed a slight increase from 4.051% in September to 4.145%, confirming the weakening of the job market. While the white unemployment rate increased from 3.6% to 3.8% the previous month, Asian unemployment remained flat from 4.1% to 3.9%, and black and Hispanic unemployment remained flat at 5.7% and 5.1%, respectively. Additionally, the labor market participation rate was 62.6%, showing its first decline since last May.

The Bureau of Labor Statistics said the Boeing strike resulted in a loss of 46,000 jobs in the manufacturing sector, including 44,000 jobs. Government sector jobs increased to 40,000 from 31,000 last month, offsetting the overall job loss along with health services. In addition, the Ministry of Labor said in its report today that there was an impact from Hurricanes Helen and Milton, which struck in late September and early October, but added that the impact could not be quantified.

“Once we exclude temporary factors and adjust for exaggerations in the data, the underlying rate of job growth appears to be below the pace needed to stabilize the unemployment rate,” said Anna Wong of Bloomberg Economics in the October jobs report for November 6-7. “The FOMC could cut interest rates by 25bp at the meeting,” he predicted. Lindsay Rosner, a bond strategist at Goldman Sachs Asset Management, also said, “The strike and the hurricane had an impact on job indicators,” and added, “The interest rate could be eased by 25bp at next week’s monetary policy meeting.” Omeyer Sharif of Inflation Insight predicted that the initial response rate was the lowest since the 1991 survey and that “the weakness in next month’s report could be resolved if we receive more survey responses.”

After the employment indicator was announced, bond yields turned to a downward trend. As of 9 a.m., the 2-year U.S. Treasury yield is at 4.092%, down 7.4bp from the previous day, and the 10-year Treasury yield is at 4.247%, down 3.7bp. The New York stock market, which is about to open, is showing an upward trend in the pre-opening futures market due to the impact of Amazon’s surprise earnings announcement after the market closed the previous day. The S&P 500 futures market, Dow futures, and Nasdaq 100 futures are each rising at around 0.5%.
Reporter Kim Jong-hak jhkim@wowtv.co.kr