In a surprising turn, the U.S. economy added just 12,000 jobs in October, marking the weakest performance in job growth under the Biden administration. With Hurricane Milton hitting Florida and Hurricane Helene sweeping through the southeast, coupled with a major Boeing strike, this report highlights how external factors can deeply impact economic momentum—especially during an election cycle.

This jobs data, reported by the Bureau of Labor Statistics, came just four days before the U.S. election. The Trump campaign was quick to respond, framing the report as evidence of economic mismanagement. In contrast, the Biden administration stressed that core labor market data—such as unemployment—remained resilient, with the unemployment rate steady at 4.1%.

Although October’s employment gains fell well below Bloomberg’s forecasted 100,000, the underlying health of the labor market appears stable. Wells Fargo’s Sarah House noted the labor market is still strong but less overheated. Revisions for August and September reveal fewer jobs were created than previously thought, emphasizing a cooling trend.

Impact on Financial Markets and Federal Policy

The weak jobs data immediately influenced market expectations. A Federal Reserve rate cut of a quarter-point, likely in December, now seems probable as the Fed seeks to protect employment without spurring inflation. Treasuries, initially reacting to the report with a dip in yields, eventually regained ground, while the S&P 500 and Nasdaq Composite both rose, buoyed by investor optimism for a potential rate cut.

Robert Tipp of PGIM Fixed Income explained, “The market is back on the Fed’s existing narrative of cautious rate cuts, aiming to avoid a harsh recession.” As natural disasters and strikes fade from the data, most economists expect a rebound.

October’s jobs report serves as a reminder of the delicate balancing act in labor policy: supporting job growth while maintaining stable inflation. With a “soft landing” as the goal, policymakers remain cautiously optimistic, ready to adjust as each monthly report adds nuance to the unfolding economic picture.