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Election-eve jobs report will be one of the most distorted in years
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Election-eve jobs report will be one of the most distorted in years

WASHINGTON — Four days before Election Day, government will release final photo employment and unemployment In the wake of the presidential race in the United States, where voters’ perceptions of the economy play a central role.

But Friday’s report will include some of the most skewed monthly employment numbers in years, with job growth stalled temporarily in October. hurricanes and worker strikes.

So while voters, politicians, and Federal Reserve officials may be looking for a clear read on the economy, they will instead encounter a blurry reading. The report comes as Donald Trump’s Republican allies are trying to undermine confidence in the reliability of monthly jobs reports to cast doubt on the health of the economy.

Economists predict Friday’s report will show only 120,000 jobs were added in October, according to data provider FactSet. That’s a good number, but less than half of September’s unexpectedly strong gain of 254,000.

Trump and his supporters have repeatedly attacked the Biden-Harris administration for inflation peaking two years ago and then steadily cooling. Despite healthy job growth, few layoffs and low unemployment, Trump accused the United States of being a “failed country” and promised that his plan to impose broad tariffs on all imported goods would restore millions of manufacturing jobs.

Typically, monthly employment data helps clarify how the economy is faring. But economists predict that Hurricanes Helene and Milton, combined with the effects of the ongoing Boeing machinists’ strike, will have reduced hiring significantly last month (by about 60,000 to 100,000); Most of these are only temporary.

Economists predict Friday’s report will show only 120,000 jobs were added in October, according to data provider FactSet. That’s a good number, but less than half of September’s unexpectedly strong gain of 254,000. The unemployment rate is expected to remain at a low level of 4.1%.

Given the impact of hurricanes and strikes, these numbers still point to a solid job market supported by healthy consumer spending that has shown surprising resilience in the face of the Fed’s higher interest rates.

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

But there may be other impacts that the government has difficulty measuring. For example, the Labor Department said it thought the Boeing machinists’ strike and a smaller strike by some hotel workers cut employment growth by 41,000 in October. However, some of Boeing’s suppliers may also have lost their jobs as the strike reduced their sales. It’s unclear how much these job losses may have affected October employment numbers.

At the same time, the hurricane may have cost fewer jobs than economists expected. For a worker’s job to be considered lost in the government’s data, they would have to lose wages for the entire pay period, usually two weeks. While many workers in North Carolina are likely out of work for that long, it’s not clear whether workers in Florida, which has more experience with hurricanes, would miss that much work, Oates said.

Economists at UBS say the major theme parks in Orlando (Walt Disney World, Sea World and Universal) only closed for two days In the aftermath of Hurricane Milton. In some states, people will be hired as part of cleanup and rebuilding efforts.

Friday’s jobs report will be the last significant snapshot of the economy before the Fed meets on Nov. 7, two days after the election. Most economists expect the Fed to cut its benchmark interest rate by a quarter point after a big interest rate hike Half point discount in September.

If the jobs report suggests that hiring remained healthy in October barring the effects of the hurricane and strike, Republican political figures could once again question the report’s credibility. Last month, when the government reported that hiring unexpectedly increased in September, Republican Senator Marco Rubio of Florida made the false charge that the report was “fake.”

But no mainstream economists share this skepticism. Other indicators, such as the number of people applying for unemployment benefits and data compiled mostly by states, also point to the job market still being solid.

“I’m appalled at how far politicians are pushing this claim,” said Julia Pollak, chief economist at ZipRecruiter. He said the Labor Department’s Bureau of Labor Statistics, which produces the jobs report, is “the most transparent government agency on the planet.”

Trump and other critics seized on frequent revisions to the government’s initial estimates as evidence of his false claims that the Biden-Harris administration was manipulating data. In August, the BLS said it expected to reduce its estimate of total jobs in the United States as of last March by 818,000, or about 0.5% of the total. During the presidential debate in September, Trump suggested the revision reflected “fraud” in employment data. But the BLS revised the job numbers under its own administration down 514,000 in 2019.

Erica Groshen, senior economic advisor at Cornell University and former commissioner of the BLS, said such revisions “are not a mistake; they are a feature of the government’s data collection process.”

“The BLS wants to receive as much information as possible in a timely manner, but it also wants the information to be as accurate as possible,” Groshen said.

The way to do this is to release early data based on surveys of tens of thousands of businesses. Revisions are then made based on late data from more companies and actual job counts from unemployment benefits agencies.

Trump’s running mate, Sen. J.D. Vance, has frequently sought to undermine positive hiring data by arguing that all jobs created last year went to immigrants.

This claim is based on the fact that the number of “foreign-born” employed people, as the BLS puts it, increased by 1.2 million in September from the previous year, while the number of native-born employed workers fell by about 800,000.

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

More importantly, native-born Americans are retiring in droves; This is one reason why many employers often have difficulty finding work. As the large baby boom generation ages, the share of Americans age 65 and older has risen to 17.3%, from 13.1% in 2010. According to Census Bureau data.

And the unemployment rate among native-born Americans, at 3.8%, is lower than the unemployment rate among foreign-born workers (4.2%).