Last Friday, the US Bureau of Labor Statistics reported that job additions in the US fell sharply. While the figure was jarring for market participants, several key factors weighed on the result, easing concerns that the labour market might be plummeting. The US labour market has bent but certainly not broken over the past few months.

• The US economy added 12,000 jobs in October, falling short of the 100,000 job additions economists had expected, based on a Bloomberg survey. This was the lowest number of job additions in a month since 2020. In September, 223,000 jobs were added.
• October’s job additions were negatively impacted by several factors. Firstly, major hurricanes slowed down hiring in the areas impacted by those hurricanes. Furthermore, a strike at Boeing Inc. brought down non-farm payrolls. Conversely, the health care sector saw a strong increase in job additions over the month.
• The US unemployment rate was unchanged at 4.1% in October. The US unemployment rate has climbed higher over 2024, with the labour market losing some momentum.
• Despite slowing, the labour market remains relatively tight, as evidenced by elevated wage growth. Average weekly earnings rose by 4.0% year-over-year in October, which was the fastest pace of growth since May 2024.

The labour market has garnered the attention of the US Federal Reserve Board (Fed) in recent months, which contributed to the Fed’s 50-basis-point rate cut in September. The Fed hopes lower borrowing costs could help lift consumer demand, which could put companies on a path to increase hiring. The Fed makes its next interest-rate announcement on Thursday. With US conditions remaining relatively strong, the Fed appears likely to slowly lower interest rates, which contrasts with the Bank of Canada, which has aggressively cut interest rates at four straight meetings.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.