United States-111263003

1Michael Feroli (1-212) 834-5523michael.e.feroli@jpmorgan.comJPMorgan Chase Bank NAMichael S Hanson (1-212) 622-8603michael.s.hanson@jpmchase.comJPMorgan Chase Bank NAMurat Tasci (1-212) 622-0288murat.tasci@jpmchase.comJ.P. Morgan Securities LLCAbiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic Research01 November 2024J P M O R G A NStorm und dragGetting a handle on the impact of strikes is a bit easier than that from the two hurricanes that overlapped with the survey week. The BLS reported that 41,400 workers went on strike; manufacturing payrolls contracted by 46,000 in October. Another 49,000 jobs were shed in the temp help sector, while retail trade and leisure and hospitality also posted small declines—the latter two industries likely seeing drags from the storms. Education and health care, as well as state and local government, stood out as relatively strong industries for job growth last month. In addition, earnings firmed slightly while the workweek held steady; one might have expected more storm-induced movement in these measures. The BLS also noted that the hurricanes contributed to a multi-decade low in the collection rate (47.4%) for the establishment sur-vey, although it’s unclear whether this biased the report. In the household survey, both the labor force and employment saw sizable declines even as the unemployment rate barely budged. The tick down in the participation rate was led by a 0.3%-pt decline in prime-aged workers; their LFPR has slid in each of the past three months. Both the number of perma-nent job losers rose and the job finding rate declined, both to levels last seen in late 2021—and both more clearly pointing to continued labor market cooling despite the unclear mes-sage from the headline numbers. A broadly similar message was seen earlier in the week as both the September JOLTS report and the 3Q employment cost index were consistent with softer demand and easing wage pressures (Figure 2). 1.01.52.02.53.03.501234567970207121722%3m/3m saar (%q/q saar for ECI)Figure 2: US private sector wage growth and quits rate Percent, saSource: BLS, J.P. MorganECIQuits rateAverage hourly earningsIndeed, jobless claims have stood out as the exception: initial claims fell to 216,000 this week, their lowest reading since mid-May. The lack of much movement in claims in response to Hurricane Milton, as well as the timing of Hurricane Helene (well before the reference week), had left us wonder-ing if the storms would have a small impact on the October jobs report as well. Continuing claims also drifted lower in the latest reported week, although this is against a broader upward trend in this series since late spring that is more aligned with the softening in other labor market data.•While the contribution from storms and strikes to the weak 12k growth in October payrolls is uncertain...•… broader softness in recent labor market data should keep the Fed on track to cut 25bp next week•An