October Nonfarm Payrolls: Assessing Labor Impact Ahead of U.S. Election

Explore October Nonfarm Payrolls: Assessing Labor Impact Ahead of U.S. Election. Discover how these critical insights shape market reactions.

Zeynep Kucukkirali

Duhani Capital Research

Duhani Capital Research

4 Min Read

Nov 1, 2024

assessing-labor-impact-ahead-of-us-election
assessing-labor-impact-ahead-of-us-election
assessing-labor-impact-ahead-of-us-election

 The Nonfarm Payrolls report is a critical U.S. economic indicator, closely watched by the market each month and historically known for heightening volatility. This report reveals the number of new jobs created in the U.S. economy over the previous month and is regarded as a fundamental measure of economic strength. Recently, a marked slowdown in job gains has prompted the Federal Reserve to focus more closely on labor market risks, making monthly payroll data increasingly significant. 

Today’s October report demands extra attention in deciphering the future direction of the labor market. Notably, the report is released just a few days before the U.S. presidential election, which adds uncertainty to how the markets may react. Under these circumstances, interpreting the data appears to be somewhat more challenging than usual. 

From Strikes to Storms: Temporary Challenges Impact October Employment Data

Hurricanes Helene and Milton disrupted numerous business operations across the U.S., while labor strikes persisted in various areas. Additionally, surveys indicate that election uncertainty is undermining hiring decisions among employers. These factors are expected to weigh down October payroll figures, and due to some factors’ temporary nature, interpreting the report will be challenging. 

assessing-labor-impact-ahead-of-us-election

Fed Governor Christopher Waller estimates that the hurricanes and Boeing strike could reduce payroll growth by over 100,000 in October. Many market observers share a similar view, though opinions range from more moderate to pessimistic forecasts. 

The median expectation of economists surveyed by Bloomberg suggests nonfarm payrolls will rise by 115,000, following a 254,000 increase in the previous month. Such a report would indicate the smallest monthly job gain since late 2020, coming in at less than half of the previous month’s increase. 

However, the disparity in economists' forecasts is striking. Projections range from a 10,000 decline to a 180,000 gain, marking the widest forecast range in nearly a year. Meanwhile, economists predict the unemployment rate will remain unchanged at 4.1%. 

Assessing Hurricane Impact: How Much Did October Payrolls Suffer?

Despite widespread expectations that hurricanes would lower payroll growth, some institutions, including Goldman Sachs, argue that the impact may have been minimal. Hurricane Helene made landfall on September 26, followed by Milton on October 9. The U.S. Bureau of Labor Statistics’ establishment survey for calculating payrolls, however, falls within the week of October 7–13. 

Goldman Sachs economists suggest that the survey’s reference period likely doesn’t entirely align with the period affected by the hurricanes. For the hurricanes to impact payroll figures, employees would need to remain without pay for the entire pay period leading up to October 13. Payroll reports would only count them as unemployed if they received no pay, even if technically still employed. 

On the other hand, payroll growth and unemployment rates are determined by different surveys and carry a significant distinction. The survey for payroll growth is conducted with businesses, whereas the unemployment rate survey is done with households. While the payroll report excludes employees with jobs but no pay, the unemployment rate calculations do not exclude them. Additionally, the household survey reports the number of people who couldn’t work due to weather conditions. 

Therefore, both market participants and the Fed are likely to focus more on the household survey than on payroll numbers. This survey can help separate the effects of temporary factors like hurricanes, potentially providing a clearer picture of the labor market's current situation. 

Meanwhile, another crucial data point in terms of expectations will be the average hourly earnings. The data showed a 4% annual increase last month, supporting higher inflation expectations, with a monthly increase of 0.4%. October’s monthly increase is expected to slow to 0.3%, while the annual increase is anticipated to remain unchanged at 4%. 

As Conclusion

Although it remains uncertain how markets will interpret critical labor data just days before the election, deviations from expectations could lead to significant volatility. A weaker labor report is likely to strengthen expectations for a quicker rate cut from the Fed, which could, in turn, support flows into precious metals. 

On the other hand, a weak report is expected to provide additional leverage to the Republican candidate Donald Trump, who has been sharply criticizing his opponent on economic grounds. Given the potential impact of a Trump victory on markets, any pressure from a weak report on the U.S. dollar would likely be mild or short-lived. U.S. Treasury yields are continuing to rise ahead of the election. Therefore, in a scenario where the report exceeds expectations, the dollar's momentum could accelerate. 

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Disclaimer: This website is owned and operated by Duhani Capital Ltd., prepared in compliance with applicable regulations. It is not intended for distribution, use, or account opening by any individual or entity in jurisdictions where such actions are restricted or prohibited by law, regulation, or internal policies.

Risk Warning: Trading Foreign Exchange (‘Forex’) and Contracts for Difference (‘CFDs’) involves a high level of risk due to leverage, which can amplify both gains and losses. These products may not be suitable for all investors, as you may lose your entire invested capital. It is essential to trade only with capital you are prepared to lose. Before engaging in trading, ensure that you fully understand the risks involved, consider your investment objectives, and seek independent advice if necessary. Please note that Duhani Capital Ltd. operates on an execution-only basis and does not provide financial advice or recommendations.

Restricted Jurisdictions: This website and its services are not intended for individuals residing in or legal entities based in the following jurisdictions, including but not limited to: USA, Cuba, North Korea, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Crimea region, Sevastopol, Somalia, Sudan, South Sudan, Syria, Venezuela, Yemen, Zimbabwe, Japan, and Iran.

Company and Licensing: Duhani Capital Ltd. is incorporated in Dominica and operates in partnership with Financial Master Management Ltd. for trading and dealing in Forex & CFDs. Financial Master Management Ltd. holds the exclusive Master Financial Dealer License (License No: 2023/C0010-0004).

FinCEN Registration: Duhani Capital Ltd. is registered as a Money Services Business (MSB) under the Financial Crimes Enforcement Network (FinCEN), Registration Number: 31000280238735.

Copyright © 2025 Duhani Capital Ltd.

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Rruga Pavaresia, Nd:129 H.5, Ap/27, Durres Albania

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+355 524 20144

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support@duhanicapital.com

Disclaimer: This website is owned and operated by Duhani Capital Ltd., prepared in compliance with applicable regulations. It is not intended for distribution, use, or account opening by any individual or entity in jurisdictions where such actions are restricted or prohibited by law, regulation, or internal policies.

Risk Warning: Trading Foreign Exchange (‘Forex’) and Contracts for Difference (‘CFDs’) involves a high level of risk due to leverage, which can amplify both gains and losses. These products may not be suitable for all investors, as you may lose your entire invested capital. It is essential to trade only with capital you are prepared to lose. Before engaging in trading, ensure that you fully understand the risks involved, consider your investment objectives, and seek independent advice if necessary. Please note that Duhani Capital Ltd. operates on an execution-only basis and does not provide financial advice or recommendations.

Restricted Jurisdictions: This website and its services are not intended for individuals residing in or legal entities based in the following jurisdictions, including but not limited to: USA, Cuba, North Korea, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Crimea region, Sevastopol, Somalia, Sudan, South Sudan, Syria, Venezuela, Yemen, Zimbabwe, Japan, and Iran.

Company and Licensing: Duhani Capital Ltd. is incorporated in Dominica and operates in partnership with Financial Master Management Ltd. for trading and dealing in Forex & CFDs. Financial Master Management Ltd. holds the exclusive Master Financial Dealer License (License No: 2023/C0010-0004).

FinCEN Registration: Duhani Capital Ltd. is registered as a Money Services Business (MSB) under the Financial Crimes Enforcement Network (FinCEN), Registration Number: 31000280238735.

Copyright © 2025 Duhani Capital Ltd.