In the USA, the non-farm payroll employment in October plummeted to 0.012 million, far below expectations, with a 4.1% unemployment rate meeting expectations. Nick Timiraos, a Wall Street Journal reporter known as the 'New Federal Reserve News Agency,' stated that the analysis of this employment report can be subjective, with most Wall Street analysts believing that the poor data was mainly due to two hurricanes in October and the Boeing strike, but some analysts are also concerned that the job market is indeed deteriorating. Almost all analysts believe that this report will not affect the expected 25 basis point rate cut by the Federal Reserve this month.

New Federal Reserve News Agency: Subjective Perspectives

Nick Timiraos said that Friday's tepid October employment report is the type of data where subjective interpretations can be made ('choose-your-own-narrative').

He said, if you already believed that the labor market was weakening, learning that net hiring in October increased by only 0.012 million, with a slight decrease in private sector employment, may further solidify this viewpoint. The unemployment rate remains at 4.1%, but partly due to a decrease in job seekers and an increase in permanent layoffs.

But if before the data release you thought that in a month with two hurricanes and multiple strikes, the data was too noisy to draw any broad conclusions, there is also reason to maintain that viewpoint. After all, the U.S. Department of Commerce stated on Wednesday that consumer spending drove the economy to achieve strong growth once again this quarter.

Overall, the report on Friday is not expected to change the clear anticipation of another 25 basis point rate cut by the Federal Reserve in November. However, this may underscore the fact that the Federal Reserve's future path will depend on how the economy performs and what risks may affect the expected steady growth and inflation decline.

Analysts: Poor data is due to hurricanes and strikes

Analyst Chris Low of FHN Financial pointed out in a report:

"The main conclusion of the October employment report is that the two hurricanes in October had a profound impact on the lives of hundreds of thousands of people. This will also have economic implications, although these effects may fade from a GDP perspective before the end of this quarter."

Chief Economist Brian Coulton of Fitch Ratings:

"The estimated impact of 44,000 strikes by the US Bureau of Labor Statistics can be added to the employment growth in October, taking a three-month moving average. This results in 119,000, although it has slowed down compared to the average of 207,000 in the first half of the year, it is not at a very serious level. Given the strong consumer demand, the Fed is unlikely to pay too much attention to the shocking number of 12,000. "

Lindsay Rosner, Managing Director of Fixed Income Investments in multiple departments at Goldman Sachs Asset Management, stated:

"Strikes and storms have impacted this month's employment data, with unexpected declines in job growth and unchanged unemployment rates. Although the Fed may attribute some of the weakness in today's data to one-time factors, the soft data supports the Fed to continue its easing cycle at next week's meeting. The data performs like a storm, but the prospect of a 25 basis point rate cut in November is gradually becoming clear."

Matt Bush, US economist at Guggenheim Investments, stated,

"(The Fed) has basically already made a decision, and whatever this report says, it is because of the uncertainty brought about by the hurricanes. The problem is, they may try to lower expectations for a rate cut after the November meeting, they may reduce expectations for a rate cut in December, or reduce their expectations for the number of rate cuts in 2025. This report is weak enough, so they will keep all options open and clearly open the door for further rate cuts after December and subsequent meetings."

Orion Portfolio Solutions' senior investment strategist Ben Vaske said:

"Compared to September and market consensus, employment growth in October dropped significantly. However, considering the election uncertainty, recent labor strikes, and the impact of hurricanes on the southeastern United States, the low growth was somewhat expected - the labor market has started to recover from the latter two effects. Despite the slowdown, the unemployment rate remains stable, and the initial reaction seems not to have affected the expectation of the Fed cutting rates by 25 basis points again in November."

Allianz Investment Management's senior investment strategist Charlie Ripiley said,

"From an investment perspective, this has not really changed people's expectations of the Fed or economic slowdown. We need to overlook the data for this month and see what results will come in the next few months without too much noise."

"There are clearly some mixed signals - weak employment data relative to the largely unchanged unemployment rate, along with a slight increase in monthly wages. Overall, it is a rather mixed report."

Laffer Tengler Investments' fixed income subject matter expert Bryon Anderson said,

"As we expected, hurricanes and the Boeing strike have caused a lot of noise in this employment report. The unemployment rate did not rise again, which is a good sign for the economy and dispels the panic people had a few months ago due to concerns about the 'Sam Rule.' Hourly wages continue to grow healthily, so we are confident in the economy. Nonfarm employment may seem weak on the surface, but this decline should be temporary as the rebuilding after hurricanes and the end of the Boeing strike are likely to increase activity."

Pessimists: The job market is indeed deteriorating

However, some analysts hold different views, believing that even considering the impact of hurricanes and strikes, the US job market is still deteriorating.

Seema Shah, Chief Global Strategist at Principal Asset Management, stated that overall, the data indicates a slowdown in the job market:

"A closer look at this data suggests that beneath all the noise and disruptions, the labor market is actually slowing down. The market expects employment numbers to increase by 0.1 million, already taking into account the impact of hurricanes, thus significantly below expectations indicating potential softness.

"This once again proves that the Federal Reserve must continue its easing cycle, despite unexpectedly strong economic activity in recent weeks. It is expected to reduce interest rates by 25 basis points in November and December respectively."

Peter Cardillo, Chief Market Economist at Spartan Carpital Securities, stated,

"Clearly, even after considering the impact of hurricanes in Florida and the Boeing strike, there is still a significant gap, indicating that the labor market may be weakening, and the Federal Reserve may have to consider more aggressive measures."

"Of concern is the hourly wage rising by 0.4% again, while the labor participation rate is declining."

"This may reignite the possibility of the Fed cutting interest rates twice before the end of the year. As of yesterday, I still expected the Fed to possibly skip a rate cut at the next meeting, but I believe we can expect rate cuts of 25 basis points in November and December."

Monex USA trading department deputy director Helen Given said:

"It is expected that employment data has been overall low for a long time, although it may not be as low as expected, but it seems that traders are somewhat skeptical of all the data this morning."

"Of note is the significantly negative net employment revision data for the past two months, casting doubt on the bright data for September. The unemployment rate remains unchanged, and average hourly wages also remain stable."

"As external factors influencing the data had been widely discussed prior to its release, the forex market reacted calmly to this."

Dakota Wealth senior portfolio manager Robert Pavlik said,

"We expected the data to be weak, but did not anticipate it to be this soft. This is a result of the combined effects of economic slowdown, hurricanes, and strikes. So I am not too concerned about its impact on the overall stock market... We still expect another 25 basis point rate cut."