U.S. nonfarm payrolls sharply declined in October, though economists view the slowdown as temporary

U.S. non-farm payroll data revealed a surprising slowdown, with only 12,000 jobs created in October, well below the forecasted 103,000 and a downward revision in September’s job count from 254,000 to 223,000. The unemployment rate remained steady at 4.1%, while average earnings edged up by 0.4% from September’s 0.3% rise.

Despite the October job growth nearly stalling, which comes just days before the U.S. election, economists largely view this as a temporary setback, impacted by recent hurricanes and strikes in the aerospace industry that significantly affected manufacturing employment.

Most economists agree that the disappointing labor numbers don’t signal a significant economic downturn or heightened recession risks. Separate reports showed that job additions were primarily in healthcare and government sectors, as recent hurricanes Helene and Milton disrupted operations, leaving over half a million workers unable to report for work.

Markets now turn their attention to two critical events: the U.S. presidential election on November 5 and the FOMC interest rate decision on November 7. The Federal Reserve is widely anticipated to implement a 25-basis-point rate cut, following September’s 50-basis-point reduction, largely prompted by July’s notable unemployment rise (4.3% from 3.8%).

The U.S. dollar initially dropped to a one-week low against major currencies following the payroll report but quickly rebounded as strong technical support levels contained the dip, with the broader bullish structure and market sentiment still positive.