The US economy added just 12,000 new positions in October, in by far the weakest jobs report of the Biden administration, as the closely watched number was hit hard by hurricanes and the Boeing strike.
Friday’s figure, published by the Bureau of Labor Statistics just four days before the US election, was far below the average forecast of 100,000 job gains in a poll of economists by Bloomberg.
It also fell far short of September’s downwardly revised figure of 223,000 new jobs. But in a sign of the underlying strength of the US labour market, the unemployment rate remained 4.1 per cent.
The figures cemented market expectations of a Federal Reserve rate cut next week. Before the data was published, futures traders had priced in a small chance rates would be held at the central bank’s November meeting.
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US government bond yields dropped from three-month highs immediately after the release of the October jobs report, reflecting falling interest rate expectations. The policy-sensitive two-year Treasury yield, which moves inversely to prices, fell 0.09 percentage points to 4.08 per cent after the payroll figure was published, reversing its previous direction.
Stock futures extended their gains, with contracts tracking Wall Street’s S&P 500 trading 0.5 per cent higher and those tracking the tech-heavy Nasdaq 100 also up 0.5 per cent.
The jobs report was the last big US economic data release before Tuesday’s presidential election. The economy is a central theme in the contest as vice-president Kamala Harris, the Democratic contender, struggles to overcome voters’ discontent about the cost of living.
The Biden administration has argued that it has brought down inflation as well as overseen a booming recovery in the labour market.
Harris was marginally less trusted on the economy than her Republican rival Donald Trump, according to the final monthly poll for the Financial Times and the University of Michigan’s Ross School of Business. – Copyright The Financial Times
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