Econ Corner Title Graphics - October 2024

U.S. employment is expected to increase by 112,000 jobs in October

KEY TAKEAWAY: Employment growth in the U.S. is expected to be modest in October 2024 due to the effects of Hurricanes Helene and Milton. Estimating the extent of this impact is challenging, even with unemployment claims statistics reported by the Department of Labor (DOL). Despite this uncertainty, Geographic Solutions forecasts an addition of 112,000 jobs, while the unemployment rate is expected to fall to 4.0%. 
LABOR MARKET OVERVIEW (1)-1
Employment Forecast - October 2024
_Econ Corner - October 2024-1

Employment 

  • Our Expectations: Looking back to August, the labor market appeared to be sliding. However, the September jobs report and revisions in previous months indicated the opposite. Unfortunately, October is unlikely to provide additional clarity due to the impact of the hurricanes. As a result, economy watchers will have to wait until the November report to see where the labor market might be heading after a confusing couple of months. 

  • Diving in: While the October weather events will be an artificial dampener on employment, it will also be an artificial booster for wages in the same survey. This typically happens, because lower wage workers are more likely to lose their jobs in this situation which leaves the average wages of remaining workers higher.

 

Unemployment Outlook 

  • Here's the Scoop: The U-6 unemployment rate, which includes discouraged, underemployed, and unemployed workers in the country, fell to 7.7% in September. The U-3 unemployment rate, which indicates only the number of unemployed people actively seeking a job, decreased to 4.1%. 

  • What Does This Mean?: The unemployment rate is expected to be less affected by the hurricanes compared to employment and wage data. This is because it excludes people who are temporarily unemployed for weather-related reasons. The small downtick anticipated in the October unemployment rate forecast points to a labor market that may have hit a soft landing and is beginning to refortify. However, it is still too early to draw conclusions.

Key Indicators 

  • What We're Watching: unemployment rate are below. They include the number of monthly job openings, average job salaries, job searchers, and the number of unemployment claims applications. This data from Geographic Solutions' (GSI) during the October survey period shows the following:

_2024 Econ Corner Key Indicator Graphic

Analyzing these figures normally helps to paint a clearer picture of what to expect from the upcoming labor market report. While still helpful, the distortions in October as well as the bounce-back effects in the next couple of months temporarily diminish the association of these economic indicators with the labor market report.  

 

Employment & Unemployment Forecast

Will the US labor market continue to grow in the coming months? If so, what’s causing this recent growth?

Yes. Although job growth will be slow, recent employment gains coupled with an uptick in labor force participation rate seem to be enough to maintain positive forward momentum.  

 

How will the surging labor market impact the Federal Reserve’s decision to cut interest rates?

The large job growth seen over the last year gives the Federal Reserve room to maintain or raise rates without pushing the economy into a recession.

Despite the recent growth of jobs, why is the labor market still tight?

The labor market may give the appearance of being tight to some, but here's why it's not.  Typically a tight labor market means that the unemployment rate maintains a low rate after a period of decline, job growth slows, and wage growth picks up. Recent growth in jobs contradicts that we're in a tight labor market.

Geographic Solutions derives its employment forecast and unemployment rate forecast from internal data on the number of job openings, searchers, and employment and unemployment applications filed on Geographic Solutions' state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

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