October jobs numbers missed estimates, but employers shouldn’t despair

The economy did not have as many jobs as expected in October, but HR leaders may have cause to be optimistic.

Nonfarm payrolls increased by 150,000 in October, according to the Bureau of Labor Statistics (BLS), but the rise fell short of the 170,000 analysts were anticipating, CNBC reported. Meanwhile, the unemployment rate rose slightly to 3.9%, despite expectations that it would hold at 3.8%.

“After years of incredible strength, the labor market could finally be slowing. The topline miss, plus downward revisions and higher unemployment, deliver a strong message to [Chair] Jerome Powell and the Fed,” David Russell, global head of market strategy at TradeStation, told CNBC. “Further tightening is now highly unlikely, and rate cuts could be back on the table next year.”

The BLS noted that one factor contributing to these numbers was the strike activity across different industries, such as manufacturing. It also revised its numbers from the previous two months, reporting nonfarm payroll employment was down by 62,000 to 165,000 in August and down by 39,000 to 297,000 in September.

But it’s not all doom and gloom. Aaron Terrazas, chief economist at Glassdoor, told HR Brew via PR rep Asia Collier. If HR leaders read between the lines, they’ll see a jobs report that is “remarkably strong,” he wrote.

Taking away the impact of the strikes, Terrazas said, would have put payroll growth closer to 200,000 jobs. This is more in line with historically tight hiring conditions. Terrazas also noted that wage growth in October has remained above trends and that participation in the labor force is strong.

“JOLTS data released earlier this week suggest a tentative pause, if not a cautious turnaround, in hiring,” he added. “Any HR professional looking past the near-term noise has to be astonished to still be seeing this degree of strength in the jobs market and has to be scared about what it might look like when interest rates do eventually fall, and consumer demand reaccelerates.”