U.S. Labor Market Shows Weakness Just Before Election

Just days ahead of the U.S. presidential election and Federal Reserve policy meeting, the government reported a marked weakening in the labor market last month, though it is unclear to what extent storms in the Southeast affected the data.

According to the Nonfarm Payrolls report, only 12,000 jobs were added in October, falling far shy of economist forecasts of 113,000. September's job gain of 254,000 was revised down to 223,000. October's unemployment rate stood at 4.1%, consistent with expectations and unchanged from September.

These employment figures come as critical data influencing both the upcoming elections and the Federal Reserve's monetary policies next week. Additionally, various other job figures show that August's initial reports of 159,000 job gains were revised lower to 78,000.

Market participants were anticipating that the Fed would cut its benchmark interest rate by 25 basis points at their upcoming meeting next week. Average hourly earnings rose by 0.4% in October, exceeding the expected 0.3%, indicating some strength in wage growth.

In response to these job figures, U.S. stock index futures held modest gains, while the 10-year Treasury yield dipped by four basis points to 4.25%. The price of gold continues to hover near record highs at $2,767 per ounce.