October Jobs Report Underscores Fragile Economic Backdrop as US Gears Up for Election and Fed Meeting

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.

The U.S. labor market hit a roadblock in October, with just 12,000 new jobs added, a dismal figure that fell far short of expectations and sparked concerns about the health of the economy. This tepid growth, a sharp contrast to September's adjusted gain of 223,000 jobs, comes as the nation anticipates the presidential election and a crucial Federal Reserve policy meeting.

The weak jobs numbers may complicate the Federal Reserve's decision, which was widely expected to announce another rate cut next week. The central bank is attempting to strike a balance between promoting growth and curbing inflation, which has remained stubbornly high.

The Bureau of Labor Statistics noted the potential impact of severe storms in the Southeast on the jobs data, although the precise extent could not be determined. Despite the weak headline, there were some positive signs. Average hourly earnings rose 0.4% for the month, outpacing September's 0.3% increase, while weekly work hours remained steady at 34.3, slightly above forecasts.

The Trump campaign wasted no time in seizing upon the disappointing jobs report, presenting it as a sign of economic mismanagement. “This jobs report is a catastrophe and definitively reveals how badly Kamala Harris broke our economy,” the campaign stated, seeking to pin the blame for sluggish growth on the administration.

On the other hand, the White House's Council of Economic Advisers attempted to provide a broader perspective on the jobs numbers, highlighting “distortionary factors” such as hurricanes and the Boeing strike. The Council noted that hurricanes caused an estimated 460,000 people to miss work, a key factor in October's slowdown.

“When the data signal gets jammed, look to the underlying trend,” the Council stated in a blog post, suggesting that the recent jobs numbers may not fully capture the broader economic状況.

President Joe Biden also acknowledged the impact of external challenges on the October jobs figures, describing the effects of “storm devastation” and strikes as temporary obstacles. “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 highlighted the broader trajectory of the economy, emphasizing that the U.S. has “created 16 million jobs since I took office.” However, he recognized 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 seen a surge earlier in the week as crypto markets reacted to macroeconomic shifts and speculation around a second-term win for crypto-friendly Donald Trump, remained volatile but held steady around the $70,000 mark post-report. The cryptocurrency had briefly attempted to break past $73,700, but faced resistance amid market jitters.

As uncertainty continues 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.