The U.S. economy remains on solid footing.
But an expected drop in payroll figures as a result of two hurricanes and a nationwide strike could temporarily mask continued labor market growth that, especially in some swing states, has by some measures rarely been stronger.
The final pre-election edition of the closely watched monthly jobs report is set to be published Nov. 1, four days ahead of Election Day. All eyes are now on a handful of states expected to see razor-thin vote margins, likely to be determined by a small but crucial pool of persuadable voters.
Many of those voters have indicated that economic concerns remain top-of-mind issues.
How those voters casts their ballots may end up being influenced by a jobs report that could show weakness spurred by hurricanes Helene and Milton — as well as a strike among Boeing workers that has affected tens of thousands nationwide. Boeing machinists voted against a new labor deal Wednesday, extending their strike.
The exact impact on the jobs report is unclear. In a note to clients Tuesday, analysts with Goldman Sachs warned that, in general, the impact of hurricanes on jobs reports “has historically been wide ranging.”
While much of the impact from Milton, which made landfall Oct. 9, likely fell outside the Bureau of Labor Statistics’ survey window for the report, Goldman said, the impact from Helene could weigh on payroll growth by as much as 50,000 jobs.
The separate weekly initial jobless claims report in hurricane-impacted states, such as North Carolina and Georgia, has already increased by 14,000 over the last two weeks, the analysts said.
In this week's release, set to publish Thursday, initial unemployment claims could climb by an additional 10,000 as a result of the storms, according to the analysts.
In a separate note to clients last week, analysts with Nomura Holdings financial group said layoffs stemming from the Boeing strike may also complicate the jobs picture in upcoming data.
The strike, which kicked off in September, has coincided with layoff notices sent to 17,000 workers in Boeing's commercial aviation division. The approximately 33,000 striking workers are seeking a 40% wage increase over four years.
However, the Nomura analysts emphasized that overall, "the underlying pace of layoffs appears to remain healthy."
Indeed, earlier Wednesday, the BLS released state unemployment data for September — which did not yet reflect the impact of the storms and the strike — showing jobless rates across a host of swing states that remained subdued or even on the decline.
For Arizona and Wisconsin, both of which Trump won in 2016 but lost in 2020, unemployment rates were down significantly lower year on year.
In Arizona's case, its 3.5% rate continues a run of all-time lows that even eclipse the pre-dot-com bubble era of the late 1990s.
As for Wisconsin, its 2.9% rate has returned the state to a level it consistently held in the years leading up to the pandemic.
Pennsylvania is arguably the most important prize in the battle for the Electoral College. While the Keystone State's unemployment rate climbed by a tenth of a percentage point compared with the September 2023 figure, its latest reading, at 3.4%, marked two straight years below 4%.
For Georgia and North Carolina, where polling among the Democratic and Republican candidates has also been tight, unemployment rates saw upward moves even before the storms struck — yet they remain at or below pre-pandemic levels.
The national unemployment rate currently stands at 4.1%.
Of course, no state is a monolith and there remain variations in economic performance depending on a state's region.
As part of its "Deciders" series, NBC News recently highlighted the economic strengths and challenges in potentially pivotal counties within swing states that are likely to determine the outcome of the election.
Among the most troubled is Washoe County, Nevada, home of Reno. There, the unemployment rate has climbed from a pandemic-era low of 2.7% in December 2021 to 4.7% in August.
That's equivalent to approximately 6,000 more working-age people who are unemployed.
On a gross domestic product basis, the storms are likely to shave at least 0.3 percentage points off Q4 GDP figures, the Goldman analysts said, but those won't be released until after the election.
"For some indicators, the distortions will be large enough—and their exact size uncertain enough—to obscure the economy’s underlying trend to some degree," they said.
The most recent monthly jobs report shocked forecasters with its strength and has served to reset much of the economic narrative for the United States. The 254,000 payrolls added in September was the biggest one-month gain since March, and immediately reduced the odds that the Federal Reserve would enact another half-point reduction in interest rates. Some are now speculating that the central bank could even forgo a cut altogether if there are signs that inflation has begun to creep upward.
While hiring rates remain very low — making it difficult for those looking for a job to land one — many other economic indicators have stabilized to healthy levels, something that could weaken arguments about subpar economic performance under the Biden-Harris administration.
“The US economy remains on solid footing ahead of the general elections," said Gregory Daco, chief economist at the consulting firm EY.
"What appears to be unfolding before our eyes is a soft-landing scenario only the most optimistic dream of.”
