There are a few known and a lot of unknown factors in the shocks that could distort October’s payroll numbers.
What is known: What is known: Striking aerospace machinists and hotel workers are expected to reduce employment by more than 40,000 jobs in October, according to the BLS’ latest strike report. In October, there were 41,400 new striking workers (the lion’s share at Boeing), in addition to an ongoing strike by video game voice actors.
On October 11, Boeing, which has the lion’s share of striking workers, announced plans to cut its workforce by 10%, or 17,000 jobs. Based on the timing of that announcement alone, none of these cuts will hurt October’s employment numbers.
What is unknown: Businesses don’t operate in a vacuum, so if operations slow down or come to a standstill without their employees, it will trickle down to other businesses.
The Boeing strike, for example, has potentially resulted in 5,000 to 7,000 layoffs at non-Boeing companies in Washington and Oregon, but it’s difficult to know the full extent, Joe Brusuelas, chief economist at RSM US, told CNN.
The biggest unknown will be the impact of the hurricanes. The last time there were back-to-back major hurricanes — Harvey and Irma in 2017 — forecasts for the next month’s jobs report were for a loss of 33,000 jobs.
That September 2017 reading was later revised upward once more information was obtained. In addition to the direct and devastating impacts that keep people out of work, weather events also impact the BLS’s ability to collect data from businesses and households.
“During a hurricane, sending your numbers to the BLS is not the highest priority,” Claudia Sahm, chief economist at New Century Advisors, told CNN in an interview. “The estimates in the event of a natural disaster often become more inaccurate.”
