October’s Weak Job Numbers Complicate Next Rate Cut

The October jobs report delivered a disappointing jolt to the U.S. labor market, with just 12,000 new jobs added—well below the anticipated 113,000. This tepid figure marks a sharp slowdown compared to September’s adjusted gain of 223,000 and underscores a fragile economic backdrop as the nation gears up for the presidential election and a pivotal Federal Reserve policy meeting.

The Federal Reserve, facing persistent inflation and now signs of labor market cooling, was widely expected to announce another rate cut next week. However, October’s weak job numbers may complicate that decision, raising questions about the broader economic resilience as the central bank tries to balance growth and inflation.

The Bureau of Labor Statistics acknowledged the potential impact of severe storms in the Southeast but could not quantify their effect on the data. Even with the weak headline, there were glimmers of underlying strength: average hourly earnings rose 0.4% for the month, outpacing September’s 0.3% increase, and weekly work hours held steady at 34.3, a marginal improvement over forecasts.

Donald Trump’s campaign jumped on the disappointing jobs report, framing it as a sign of economic mismanagement. “This jobs report is a catastrophe and definitively reveals how badly Kamala Harris broke our economy,” Trump’s campaign stated, aiming to pin the blame for sluggish growth on the administration.

Meanwhile, the White House’s Council of Economic Advisers sought to contextualize the numbers, pointing to “distortionary factors” like hurricanes and the Boeing strike. The Council highlighted a jump of 460,000 people out of work due to weather disruptions, calling it a significant factor in October’s slowdown. “When the data signal gets jammed, look to the underlying trend,” they wrote in a blog post, suggesting the recent numbers may not reflect the broader economic picture.

President Joe Biden also acknowledged the role of external challenges in shaping the October figures, describing the impact of “storm devastation” and strikes as temporary hurdles. “Job growth is expected to rebound in November as our hurricane recovery and rebuilding efforts continue,” Biden said, expressing optimism for the months ahead.

Despite the weak report, Biden defended the broader trajectory of the economy. The U.S., he noted, “remains strong, with 16 million jobs created since I took office.” Still, he acknowledged that challenges remain. “There’s more work to do. We are working every day to lower costs for working families on rent, prescription drugs, health insurance, and child care,” he added, underscoring the administration’s focus on affordability for Americans.

Bitcoin, which had surged earlier in the week as crypto markets responded to macroeconomic shifts and speculation around a second-term win for crypto-friendly Donald Trump, remained volatile but steady around the $70,000 mark post-report. The cryptocurrency had made a brief attempt at breaking past $73,700, only to face resistance amid market jitters. As uncertainty looms over next week’s Fed moves and election outcomes, the coming days will be closely watched for potential market ripple effects, with Bitcoin now down to the $69,000 level.

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Source: BNC Bitcoin Liquid Index