Nonfarm payroll growth in October was nearly unchanged, increasing by only 12,000. This figure is significantly lower than the previous 12-month average of 194,000, marking the smallest monthly increase since late 2020. The rise was primarily driven by gains in the healthcare sector and government employment, while employment in manufacturing declined by 46,000, due to worker strikes.

A key aspect of the report was the downward revisions to previous payroll figures. August nonfarm employment was revised down by 81,000, from 159,000 to 78,000. September figures were also revised down by 31,000, bringing the total from 254,000 to 223,000.

The unemployment rate remained steady at 4.1%. The household survey shows that the number of temporary layoffs was largely unchanged at 846,000.

Additionally, average hourly earnings rose by 0.4% month-over-month in October, surpassing expectations of a 0.3% increase. Over the past 12 months, earnings have grown by 4%, unchanged.

Following data earlier in the week that boosted optimism regarding the labor market, these figures temper expectations that the Fed will slow the pace of rate cuts. U.S. Treasury yields fell approximately 8 basis points after the report, the U.S. dollar remained under pressure, and precious metals held steady.

However, the steady unemployment rate indicates that the decline in payroll figures is due to temporary factors. In this context, the Fed is unlikely to use this month’s report as a reference point. While the U.S. labor market may be cooling, this report alone does not indicate any significant deterioration.