Storms and Strikes Muddy October Jobs Report

Hurricane and strike distortions to payrolls were expected; Federal Reserve Board Governor Chris Waller noted in a recent speech that these factors “may reduce employment growth by more than 100,000 this month.” The Fed is likely to look through the noise ahead of next week’s FOMC meeting on November 6-7.

On top of other data this week that underscored the economy’s recent strength, October’s jobs report showed wage pressures continue to moderate. Elevated wages and high productivity have supported household incomes and consumer spending, helping to propel growth. With solid data in hand but some uncertainty about the labor market given October’s disruptions, we view a 25bp rate cute next week as the FOMC’s most likely move.

Summary:

• October payrolls grew by a modest 12,000 jobs, reflecting the impact of h