With the election now just two trading days away, markets are balancing a wide range of competing factors. We have an economy that isn’t producing much by way of jobs. Yet corporate earnings, largely tied to the ongoing tech boom, have been solid.
Of course, by early next week, we could have an entirely new outlook on the trajectory of the economy and the country over the next four years.
While understanding these different macroeconomic pressures and political uncertainties is important, investors should avoid getting too distracted. As always, the focus should be on investing in resilient businesses that will generate long-term value for their owners.
The Bureau of Labor Statistics once again produced a disappointing jobs report. New jobs were expected by economists to come in around 100,000. The actual reported number was only 12,000.
The BLS also reported yet another downward revision to previous results. Previously, net new jobs created in August and September totaled 413,000. This figure was just revised down by 112,000 to 301,000, a 27% reduction.
Dog ate my homework
Hurricanes Helene and Milton were identified as having a potentially sizable but undetermined impact on job growth in October. Additionally, “strike activity,” largely a reference to the Boeing strike, was tied to 44,000 lost jobs. Strike activity was blamed for the lion’s share of a reported 46,000 decrease in manufacturing jobs.
To be fair, the weather events and the Boeing strike were complicating factors. We would emphasize, however, just how dependent employment has become on government payroll expansion. New government jobs significantly exceeded the total number of net new jobs, implying private sector job losses.
