Business Rundown: Voters Get Cloudy Economic Picture Before Election Day
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- I'm Geri Willis, and this is the Fox Business Rundown. Friday, November 1st, 2024. America has gotten its last economic snapshot before election day, and it's a doozy. The latest jobs report showing a major hiring slowdown, raising questions for voters as they head to the ballot box in the next few days. - This does not bode well for the American people going forward who are gonna find it harder and harder and harder

to find a job over the next 12 months. - A weaker than expected jobs report released Friday morning gives voters a fresh picture of the US economy as we quickly approach the eve of election day. The economy growing by just 12,000 jobs, dramatically short of economist expectations of 100,000.

You can see right in the data that U.S. job growth did take a hit last month, and that can be partially attributed to a few factors: a sizable labor strike movement from Boeing workers, as well as many American laborers negatively impacted by hurricanes.

However, even when accounting for those factors, economists agreed the report spelled a concerning data point that could be part of a larger trend. Unemployment ticked up by a fraction of a percentage point and revisions to payroll numbers subtracted 112,000 jobs from the August and September labor data.

This report giving the Trump campaign some pre-election day fodder as the former president is already touting this report as an economic catastrophe. Meanwhile, the Biden-Harris administration has said the economy remains strong.

As voters head to the ballot box in the coming days, how should they consider the health of the economy given this fresh data? And what should they make of the numbers? Yeah, bad and ugly is what it is. But, you know, and we had heard in the in the days leading up to this report, the White House really sort of behind the scenes, sort of pulling people aside, saying, hey, you know, expect this to be lower. Here's the reason. Edward Lawrence is Fox Business Network's White House correspondent.

And they're blaming this here at the White House on Hurricane Helene as well as Hurricane Milton. Helene made landfall right before the survey period was taken. Milton made landfall exactly at the same time the surveys were being taken. And then on top of that, you had the Boeing strike, which did play into this. Now, all of it did affect the report. You know, how much it affected the report. You're only talking about a few states. I say only, but the destruction and devastation was horrible.

But you're talking about just a few states in the United States. On the Bureau of Labor Statistics, one statistic I'll give you, manufacturing. You know, manufacturing employment in this, again, we added 12,000 jobs overall, but manufacturing lost 40,000 jobs overall.

in October, 46,000 jobs in October. And of course, we're seeing big gains for government, right? Which is always concerning and worrying. It's the private sector that seems to be hurting here, which I found interesting. I read that Boeing job losses accounted for 44,000 jobs, but it's not clear to me that what was going on in the wake of the hurricanes would have necessarily caused job losses.

People may have lost time on the job. They may have lost a paycheck, but did they actually lose their job? I mean, I think it's an open question. And I think this idea that you can just accept that line, maybe not. Maybe there's more at work here.

And that's the point that I have been heard that I've heard is, is that, yeah, hurricanes would affect jobs somewhat, but not to the extent where we're expecting one hundred and twelve hundred thirteen thousand jobs and we get twelve thousand jobs. And you're right. You know, manufacturing shows forty six thousand jobs lost in October. Forty four thousand, according to the Bureau of Labor Statistics, could have been about forty four, could have been related to a strike. So that means that manufacturing still was losing jobs.

And that trend had continued over the past three months. Manufacturing in August lost jobs, in September lost jobs, and now in October has lost jobs. And this White House, this president, is the jobs president wants to bring manufacturing back to the United States. So I actually asked the acting Labor Secretary, Julie Hsu, about this. And I said, hey, is this a trend that we are losing manufacturing jobs? And her point was,

Well, we just lump it in with construction jobs because construction is doing a little bit better. And eventually, we're going to see the manufacturing jobs. But this is what we've been hearing from this White House for the past three years. Eventually, inflation will come down. Eventually, we're going to get the jobs. Eventually, we'll get the prices down. And we just keep hearing eventually at some point in the future. Let me ask you this. The Council of Economic Advisers is saying, hey, you know, you got to look at the trends. And the economy has added about 2.2 million jobs over the past year.

And the direct quote here, which I found very interesting, when the signal gets jammed, look to the trend. But you just cited another trend which is concerning in those manufacturing jobs. Is this political spin at this point? Trump is calling it a catastrophe, this report. What is it? Is it a catastrophe or is the economy still growing robustly and creating enough jobs for American workers?

I think it probably can be both at the same time. It's catastrophe for a political person who's running for office. It is also we are seeing the economy grow. You know, the fact is that there were jobs added to the economy. The economy is still growing. But

Your labor is being squeezed. And this is what the Federal Reserve has looked at, is that they're saying we're not seeing layoffs en masse. We're seeing some layoffs. But what we're seeing is companies limiting the people that they hire. And that's the point. It's going to be harder to find a job. And that's what this report will show you, too. It's going to be harder to find a job. Now, on the flip side of that, the markets, I mean, you see the markets take off.

on a report that has just 12,000 jobs. Well, the markets are looking at interest rates, and this guarantees a rate cut at the next meeting and possibly in December, too. Plus, the conversation is maybe half a percent for a rate cut at the next meeting. And that's what the markets are looking at with this, is cheap money. This does not bode well for the American people going forward, who are going to find it harder and harder and harder to find a job over the next 12 months.

I want to talk about those revisions because this is pretty substantial as well. We keep seeing more and more revisions. I want you to talk about that, but also the idea that some people have, analysts and others, that how reliable are these jobs when there are major revisions every month to prior reports?

Yeah, and there is a lot of noise, as they call it, in these reports. And in fact, I look back, five of the last six reports were significantly revised down. September jobs were revised down by 31,000. August jobs were revised down by 81,000. That's a combined 112,000 fewer jobs.

than previously thought. The Federal Reserve has also looked at this and said there's a lot of noise and they can't really trust the numbers, but they do look at, you talk about trends, they do look at the trends over time and what they're seeing is fewer and fewer and fewer jobs added regardless of what the number is.

And that's the problem as you look at the trends. On the revisions, I think that the Bureau of Labor Statistics is going back and they're looking at this and they're gonna try and figure out, is what I've been told, what's going on here. And it might be the fact that they are collecting data initially on folks who may not be

have legal status in the United States who are working, and that might have got sucked into the jobs numbers. And then when they're revised, they actually look at the U.S. workers or people who are working here illegally, and that's where the revisions come from. There is an investigation. I say investigation. There's a review of what is going on with these numbers and why they're constantly being revised down.

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I just want to get you to this. Earnings went up 4%, well above what we thought was going to happen. This inflationary pressure continues. That's, of course, good news for workers who get more money in their paycheck. But ultimately, we're continuing to see inflation pressure in this economy. I noticed that housing prices are continuing higher in the most recent month. There seems to be no end in sight.

And despite the fact that, you know, the Fed may come in and yet again cut rates. So where do you stand on this idea of inflation?

- And I know you look in-depth at housing related to this stuff. I've seen your reports on this, and you do a lot of really good reporting looking at that. You talk about housing in the Federal Reserve, that's the sticky inflation they're talking about. We got the Fed's favorite inflation rate, PCE inflation. Core inflation, without food and energy prices, that sticky inflation is 2.7%. That is closer to 3% than it is to 2%, where the Federal Reserve would like to see it.

And that sticky inflation is coming from housing. The Federal Reserve chairman himself said that he thought rents would reset at a lower level as they cycle through, and that's just not what they're seeing yet. Now, the Federal Reserve is saying, well, wait a minute, let's wait a little bit longer. It's going to happen.

But some folks are looking out there saying, well, we have a shortage of housing out there. So rents are not and home prices are not going to come back down because of the shortage and the influx of people that we have coming into the United States. So this is going to be very interesting to see how it goes forward and how it plays out with these pressures. Now, on the earnings reports, I have heard some analysts talk about how people are buying, yes, but they're buying less and paying more for what they're buying.

So therefore the companies are making more revenue. Right. To get you to the big picture, before I let you go, I know you're very busy. Let's talk about jobs and the broader economy, the impact on the broader economy. It seems to me to consumers, jobs are a big part of their world. And whether that jobs are growing, whether they're paying more, what jobs are on offer, you know, the quits rate in the most recent JOLTS survey,

went down people are stopping at they're not quitting as much anymore and we're seeing the companies are offering few fewer newer jobs obviously from this report what does it tell you about the broader economy I you know it

It seems like, it feels like, and this is not a scientific or based on a lot of facts, but it feels like we're bouncing across the bottom, sort of up and down, up and down, up and down, across the bottom. Going forward, a number of analysts that I have talked with, including the Federal Reserve, which is why they made their shift from inflation concerns

to job concerns is they're worried about this slowdown in the economy. Now, how quickly is it going to slow down? Depends on how things unfold going forward. You know, we're already seeing a lot of government spending out there and that government spending has been propping up the economy sugar high in the jobs report. Government created 40,000 jobs. It's one of the highest sectors of job creation. So government money has been pushing a lot of this growth. If we get a new administration and that government money slows down or stops and the economy has to

stand on its own two feet we may see a significant slowdown related to that because at the moment you have a lot of industries that have shifted and and are relying on these government subsidies in order to do various things and part of them evs or or you know the the green energy push that we have you know if if something changes and those subsidies are no longer there then you're gonna have to have an economy that stands on its own two feet and i you know

I worry, I'm concerned about the future looking at all of the data that I've seen in the totality. And related to jobs, I think you're going to start to see people hold on to the jobs they have, which is what we're seeing, as you mentioned, in the quits rate. And I think that you're going to see it harder and harder and harder as companies downsize, realizing they can do more with less.

It goes with retail space also. They will start to downsize their footprints. And you'll see that contraction going in as they try and squeeze out money. Now, the X factor in all of this is, let's say former President Trump wins and he does what he did in his first term. He opens up energy and that boosts the economy and it boosts growth. That could change things.

let's say Vice President Kamala Harris wins and she continues the government spending that we have, that could further prop up the economy. So there's a lot of X factors out there, but going forward, jobs are going to be what people really need to hold on to and what they need to look at.

Great information. Ed Lawrence, Fox Business's White House correspondent. You are awesome and we so appreciate your help. Thanks for all the information and for everything you do. I know you'll continue to watch this super closely. Thank you. Thank you, Ed. Thanks, Jerry. Appreciate it.

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