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US NFP: October Jobs Report Hugely Undershoots Estimates with Just 12,000 Hires
Key points:
- Jobs data comes in weaker than expected
- US employers added just 12,000 workers
- Stocks rally as investors shrug it off
Behind the dire picture is a mix of bad weather, hurricanes, storms and strikes. Hence, the stock market shrugged it off. And rallied.
- The US nonfarm payrolls report
USNFP delivered a surprise sharp drop with just 12,000 new hires added in October. The tally was the lowest since December 2020 and greatly undershot expectations of 112,000 and September’s 223,000, revised from 254,000. To make matters even more tense, the jobs data comes just before the Presidential US election on November 5. - Still, that dismal figure wasn’t scary enough to spook investors. Instead, they jumped in and scooped up risk assets, lifting all three major indexes up by 0.5% or more for the day. The reason for optimism? One-off events likely weighed on the labor market, including two deadly hurricanes, storms, and strikes. A Boeing strike, which lasted seven weeks, likely subtracted 44,000 workers.
- With this in mind, many analysts are already highly optimistic about the next month’s report — the November gains may actually be higher than previously anticipated. Besides the looming US election next week, the Federal Reserve is meeting up to decide the fate of interest rates and that ugly jobs figure may help convince policymakers to proceed with another jumbo-sized cut to borrowing costs.