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Election-eve jobs report will be among most distorted in years
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Election-eve jobs report will be among most distorted in years

Four days before Election Day, the government will release its final outlook for U.S. hiring and unemployment after a presidential race in which voter perceptions of the economy have played a central role.

WASHINGTON — Four days before Election Day, the government will release its final snapshot of hiring and unemployment in the United States after a presidential race in which voter perceptions of the economy have played a central role.

However, Friday’s report will include some of the most distorted monthly employment figures in years, as job growth remained temporarily low in October for hurricanes and worker strikes.

So just as voters, politicians and Federal Reserve officials look for a clear read on the economy, they will instead get a confusing read. The report comes as Donald Trump’s Republican allies, seeking to sow doubt about the health of the economy, have tried to undermine trust on the credibility of monthly employment reports.

Trump and his supporters have repeatedly attacked the Biden-Harris administration over rising inflation that peaked two years ago before steadily cooling. Despite healthy job growth, few layoffs and low unemployment, Trump has also accused the United States of being a “failed nation” and has promised that his plan to implement sweeping tariffs on all imported goods would restore millions of jobs in the sector. manufacturer.

Monthly employment data usually helps clarify how the economy is doing. But economists estimate that hurricanes Helene and Milton, combined with the effects of the ongoing Boeing machinist strike, will have reduced hiring last month by a significant amount: approximately 60,000 to 100,000 jobs, most of them only temporarily.

In total, economists have estimated that Friday’s report will show that only 120,000 jobs were created in October, according to data provider FactSet. This is a decent number, although less than half of the unexpectedly strong increase of 254,000 in September. The unemployment rate is expected to remain at a low of 4.1%.

Once the impact of the hurricanes and strikes is considered, those numbers would still point to a strong labor market, which has shown surprising durability, fueled by healthy consumer spending, in the face of high interest rates from the Federal Reserve.

“This is an incredibly resilient economy,” said Jane Oates, a former Labor Department official during the Obama administration. “People are spending. “That’s what keeps this economy alive.”

However, there may be other effects that are more difficult for the government to measure. The Labor Department, for example, has said it believes the strike by Boeing machinists, along with a smaller strike by some hotel workers, reduced job growth by 41,000 people in October. But some of Boeing’s suppliers may also have lost jobs as the strike reduced their sales. It’s unclear what impact those job losses might have had on October’s employment numbers.

At the same time, the hurricane may have cost fewer jobs than economists expect. A worker would have to lose pay for an entire pay period (often two weeks) for their job to be considered lost in government data. Although many workers in North Carolina were likely out of work for that long, it’s not clear that in Florida, which has had more experience with hurricanes, employees would have lost as much work, Oates said.

UBS economists noted that Orlando’s big theme parks (Walt Disney World, Sea World and Universal) were closed only for two days after Hurricane Milton. And in some states, people will be hired as part of cleanup and rebuilding efforts.

Friday’s jobs report will be the last major snapshot of the economy before the next Federal Reserve meeting on Nov. 7, two days after the election. Most economists expect the Federal Reserve to cut its benchmark rate by a quarter point, after a huge half point cut in September.

If the jobs report suggests that hiring remained healthy in October excluding the effects of the hurricanes and the strike, Republican political figures may question its credibility again. Last month, when the government reported that hiring had unexpectedly increased in September, Sen. Marco Rubio, R-Fla., made the baseless charge that the report was “false.”

However, no mainstream economist shares such skepticism. Other indicators, such as the number of people seeking unemployment benefits, data that is compiled primarily by states, also point to a still strong labor market.

“I’ve been horrified by the extent to which politicians have made that argument,” said Julia Pollak, chief economist at ZipRecruiter. The Labor Department’s Bureau of Labor Statistics, which produces the employment report, “is the most transparent government agency on the planet,” he said.

Trump and other critics have seized on revisions often made to the government’s initial estimates as evidence of their false claim that the Biden-Harris administration has manipulated the data. In August, the BLS said it expected to lower its estimate of total U.S. jobs through last March by 818,000, or about 0.5% of the total. During the September presidential debate, Trump claimed that the revision reflected “fraud” in employment data. However, under his own administration, the BLS’s revised job count down in 2019, by 514,000.

Erica Groshen, senior economic advisor at Cornell University and former BLS commissioner, explained that such reviews “are not a mistake; are a feature” of government data collection.

“BLS wants to disseminate as much timely information as possible, but it also wants the information to be as accurate as possible,” Groshen said.

The way it does this is to publish initial data, based on surveys of tens of thousands of companies. Revisions are then made based on late-arriving data from more companies and actual job counts derived from unemployment benefits agencies.

Trump’s running mate, Sen. JD Vance, has often tried to undermine positive hiring data by arguing that all jobs created in the last year went to immigrants.

That claim is based on the fact that the number of employed “foreign-born” people, as the BLS calls them, increased by 1.2 million in September from a year earlier, while the number of employed native-born workers fell at around 800,000.

However, the “foreign-born” category includes people who have been in the United States for years, including since childhood, and are now citizens, as well as recent immigrants, both authorized and unauthorized.

More importantly, native-born Americans have been retiring in droves, one reason why so many employers have often struggled to fill jobs. As the huge baby boom generation ages, the share of Americans age 65 and older has risen to 17.3%, up from just 13.1% in 2010. according to data from the Census Bureau.

And the unemployment rate for native-born Americans, at 3.8%, is actually lower than the unemployment rate for foreign-born workers, at 4.2%.