CURRENT EVENT NEWS IN FINANCE

JOB CREATION STUTTER IN OCTOBER: WAS IT JUST A BUMP IN THE ROAD?

October of 2024 has produced the least amount of jobs this year to date at only 12,000 new jobs, compared to the previous lowest of the last two years since January of 2022 being August of 2024 at 78,000. The numbers for August were not the originally predicted numbers either, with it being cut down to 78,000 along with September being cut down to 223,000, totaling an adjusted net loss of jobs to 112,000 jobs (Cox, 2024). This massive loss is currently being attributed to the twin-disaster hurricanes of Hurricane Helene and Hurricane Milton. Hurricane Milton took about thirty lives (Frigerio, 2024), while Hurricane Helene, having struck parts of the United States that do not commonly see severe weather or hurricanes, saw fatalities that are second only to Hurricane Katrina in 2005, which took 1,392 lives (Falconer, 2024). North Carolina also sees about 45% of their small businesses operate out of the western area of its state, which unfortunately was along the destructive path of Hurricane Helene. This large amount of small businesses being affected by Hurricane Helene is also being currently attributed to the aggressive downturn that we see for the month of October.

On a personal note, a past conversation with a family member tells me a story of how she was lucky to come out unscathed from Hurricane Helene. The shape of her home in Florida, as well as a fortunate placement between other larger homes, saw that she came out relatively unscathed, though her neighbors were not so lucky. She said that a palm tree had gone completely horizontal, crushing her neighbors’ porch cover, and even saw the upper portion of the nearest gas station had gone completely missing. She didn’t seem all too concerned, though, as terrible weather was to be expected, and was actually far more concerned about when the local Mexican restaurant would be opening at 3 p.m. instead of their usual 8 a.m. Surprisingly for me, they did indeed open their restaurant the day immediately after the hurricane had passed, at 3 p.m. sharp.

This 12,000 job creation statistic is down sharply from the estimated 100,000 jobs that Dow Jones had estimated, though despite this, unemployment remains at the previously predicted and expected 4.1% (Cox, 2024). The Bureau of Labor Statistics (BLS) mentioned that, on top of the devastating impact the twin hurricanes left on much of the southern United States, Boeing lost approximately 46,000 jobs amidst the strikes (BLS, 2024). However, with the strike at Boeing having only just ended on Tuesday, November 5th, it would not be remiss to imagine that November may overshoot expectations as jobs slowly come back into rotation, as companies in affected states begin to attempt to reopen doors and as business starts to move along once more at Boeing (Catchpole, 2024).

The Boeing strike ended with union members seeing a 38% increase in wages across the next four years, a bump to increasing 401k contributions, and a $12,000 ratification bonus with 59% of union members voting to pass the deal. However, one could also view this as this deal only passed with 59% agreeing with the deal, especially with this new deal dropping the entire pension plan that members originally had (Catchpole, 2024). That means a whopping 41% of members did not agree with the new deal, with some members feeling that union heads were too eager to back down, even agreeing to take a deal that 95% of union members had voted against (Catchpole, 2024). The almost 40% of people who did not want to take the new deal will simply have to, though, with the strike being officially over. Regardless of the feelings around the deal, with employees finally starting to head back to work at Boeing, job loss is expected to stop.

Boeing is not the only company facing strikes, however. Starting at the beginning of October, workers at a number of U.S. ports along the U.S. East Coast have gone on strike, with roughly 45,000 members conducting the strike. 46 ports have demanded the stop of the automation of cranes, gates, and container-moving trucks, as well as a 77% raise across six years (Anderson, 2024). This strike also began the day that the contract between the International Longshoreman’s Association (ILA) and the United States Maritime Alliance (USMX) expired. This strike follows issues that were not addressed in the renewal of a new contract, and though the USMX says that it will be resuming contract talks, results are yet to be seen (Carranza, 2024).

When all is said and done, the fear still lingers: Will we be facing another Great Recession? While many of the youth who are now entering the workforce were far too young to recall the Great Recession in 2008, many of those who were at least sentient remember the fear of not being able to put food on the table and keep the water running as quite the common fear. The destructive wake of two hurricanes, paired with an oncoming tumultuous presidential election, has left many Americans concerned whether or not this October’s massive loss in jobs was only due to the hurricanes, or maybe the hurricanes only happened to occur in a month that would already have been poor for new job creation. While job creation has remained steady, with October hopefully being an anomaly, there remains much anxiety with what is left to come.

Lance Carr

November 8th, 2024

References

Anderson, M. (2024, October 4). 7 things to know about the U.S. dockworkers strike and its effect on the economy [Review of 7 things to know about the U.S. dockworkers strike and its effect on the economy]. PBS; News hour Productions. https://www.pbs.org/newshour/economy/7-things-to-know-about-the-u-s-dockworkers-strike-and-its-effect-on-the-economy

Catchpole, D., & Lampert, A. (2024, November 4). Boeing strike ends as workers accept new contract. Reuters. https://www.reuters.com/business/aerospace-defense/boeing-workers-vote-wage-deal-that-could-end-strike-2024-11-04/

Carranza, A. (2024, October 25). ILA, USMX to resume contract talks next month. Supply Chain Dive. https://www.supplychaindive.com/news/ila-usmx-master-contract-negotiations-resume-november/731118/

Cox, J. (2024, November). U.S. economy added just 12,000 jobs in October, impacted by hurricanes, Boeing strike. CNBC. https://www.cnbc.com/2024/11/01/us-jobs-report-october-2024.html

Falconer, R. (2024, October 4). Hurricane Helene now one of the deadliest storms to hit the U.S. this century. Axios. https://www.axios.com/2024/10/04/hurricane-helene-deadliest-us-storms-death-toll

Frigerio, J. (2024, October 19). Hurricane Milton deaths in Florida: County-by-county reports. FOX 35 Orlando. https://www.fox35orlando.com/news/hurricane-milton-deaths-update-10-18

U.S. BUREAU OF LABOR STATISTICS. (2024, February 2). Employment Situation Summary. Bls.gov. https://www.bls.gov/news.release/empsit.nr0.htm