Members of the United Auto Workers Union have been on strike for nearly 40 days, significantly reducing employment growth in the United States in October 2019. The US release rate is expected to fall from a low of 3.5% in the past 50 years. The US State Department is closely following the monthly employment report. The data shows that the country’s economic growth slowed in the third quarter of 2019. This is due to the decline in business investment caused by trade tensions.
The Federal Reserve (Fed) cut interest rates for the third time this year, but it marks a suspension of the loose cycle since July, which is the first time since 2008 to reduce borrowing costs. Ryan Sweet, a senior economist at Moody’s Analytics in Westchester, Pa., said: “Because of GM’s strike, the noise in this employment report is greater than the signal.” According to a Reuters survey of economists, nonfarm payrolls may only increase by 89,000 jobs in October, and manufacturing has at least 50,000 jobs, the highest level since 2009. Employment in September increased by 136,000 jobs. Last Friday’s government data showed that 46,000 GM employees were idle at automakers in Michigan and Kentucky during the October payroll survey.
Strike workers who did not receive a salary during the payroll survey were considered unemployed. The strike ended last Friday and has had an impact on suppliers in the automotive industry. This has led economists to think that from the October payroll, the stoppage has cut 75,000 to 80,000 jobs. Even without strike distortions, job growth this year is still slowing, with an average of 161,000 per month, compared to the average monthly increase of 223,000 in 2018. The trade war between China and the United States for nearly 16 months has weakened business investment and has been accused of slow job growth. The Manufacturing Management Association’s (ISM) manufacturing employment index has contracted, which may indicate that manufacturers may be planning layoffs. ISM’s service industry employment indicators have also declined. Employment in the construction industry is expected to increase in October, although the number of recruits has fallen from the 56,000 peaks in January. Government employment is expected to increase further, in part because of the hiring of the 2020 census.