Final jobs report before Election Day shows US economy added 12,000 positions amid strikes and storms

By Alicia Wallace, CNN

(CNN) — The monthly jobs report — the final piece of major economic data to land before a consequential, contentious and too-close-to-call election — was clear as mud.

The US economy added just 12,000* jobs in October, according to data released Friday by the Bureau of Labor Statistics. If the initial estimate were to hold firm, it would be the weakest monthly job gain since 243,000 jobs were lost in December 2020 when Covid and its variants reared their ugly head.

Friday’s tally is far below September’s revised total of 223,000 jobs added and expectations for a 112,500-job gain.

*And now to the asterisk: Friday’s net gain was a reflection of temporary shocks to the US labor market, with this snapshot bearing the impacts and ripple effects of two major deadly hurricanes and large labor strikes.

“Between storms, labor strikes and data collection issues, the labor market numbers we’re seeing today should be taken with a grain of salt,” Elizabeth Renter, senior economist at NerdWallet, wrote in commentary issued Friday. “Even though they came in lower than anticipated with that in mind, the news doesn’t warrant panic about overall economic health.”

Economists had warned that those events would heavily distort the data, making it much harder to interpret the true underlying health of the labor market.

On Friday, BLS said as much, noting a shorter data-gathering period was exacerbated by collection efforts in weather-affected regions.

However, amid the murkiness in the payroll data, the unemployment rate (which is generated by a different survey that doesn’t count weather-affected workers as unemployed) provided a signal of stability in the labor market: It held steady at 4.1%.

“I think we’d start to get more concerned if we saw people losing their jobs,” Cory Stahle, an economist at the Indeed Hiring Lab, told CNN in an interview Friday.

Expectations for an eventual upward revision

The dual hurricanes of Helene and Milton, which made landfall on September 26 and October 9, respectively, impacted the ability for the BLS to collect data from businesses in the affected regions, officials for the labor data agency wrote in a note accompanying the jobs report.

In the establishment survey — one of two surveys that feed into the monthly employment report — the reference period is the pay period that includes the 12th of the month. If an employee did not work and did not receive any pay during that period, they would not be counted as employed.

Those data-collection challenges were exacerbated by a shorter collection period: Typically, the BLS gathers data over a range of up to 16 days; but in October, it was 10 days, according to the report.

“It is likely that payroll employment estimates in some industries were affected by the hurricanes; however, it is 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,” BLS officials wrote in the report.

The response rate of 47.4% was the lowest since 1991, BLS data shows. That rate has averaged 65% in the past four years.

Additionally, the BLS did not make any adjustments to its estimation procedures for either the establishment or household survey; so, by letting the numbers speak for themselves, that sets the stage for this meek 12,000-job figure to grow in the coming months, Stahle said.

“I think the expectation here would be for it to be revised upward,” he said.

Data is volatile, it is fluid, and it’s often revised as more comprehensive information becomes available.

When it comes to the jobs report, monthly estimates are considered preliminary when first published, because not all respondents report their payroll data in time (and that’s especially true this time; because in moments of crisis, submitting data to the BLS is not a priority for those dealing with the devastation of the storm).

Those survey-based estimates are revised twice further and then held constant until the BLS applies its robust “benchmarking” process to square the estimates with quarterly tax filings.

Looking through the noise to find the trend

The BLS also noted that there was no discernible effect in its household survey, which generates the unemployment rate. That survey counts people who miss that week of work for weather-related events as employed (regardless of pay).

As such, even though the household survey is typically considered the more volatile of the two, how much or how little the unemployment rate shifted was expected to provide a truer indicator of the health and trajectory of the underlying labor market, economists told CNN this week.

While the expectation is for this number to grow — as did the Hurricane Harvey and Irma-impacted September 2017 data that started out as a 33,000-job loss and was revised up to a 18,000-job gain in the following month — the recent trend of revisions has been to the downside.

That was the case Friday when September’s surprisingly strong gains of 254,000 were revised lower to 223,000; and August’s weaker-than-expected job growth plunged by 81,000 to land at a mild 78,000 gain.

This story is developing and will be updated.

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CNN’s Matt Egan contributed to this report.