The October jobs numbers were flat out terrible, with the emphasis on the flat, meaning virtually no change from September.

The Dow Jones polled estimate was 110,000 new jobs, which itself would have been far off from the previous month. Instead, it was 12,000 total, or 10.9% of the expectation. A roughly 89% disappointment. According to the Bureau of Labor Statistics (BLS), it takes a month-over-month change of about 130,000 to be statistically significant.

Media outlets reported experts, pundits, and some politicians blaming the results on Hurricanes Helene and Milton as well as the Boeing labor strike. But things are more complicated.

The first step to better understanding is to remember that jobs and employment/unemployment numbers are the results of two major surveys: the establishment and household surveys, respectively.

There is a 10-to-16-day period each month during which establishment data is obtained. In October, it was 10 days, ending a few days before the close of the month, but well within the ongoing influence of both hurricanes. The response rate was “well below average,” the BLS said. That could significantly affect results.

The agency noted it was “likely that payroll employment estimates in some industries were affected by the hurricanes.” However, even though were likely effects from the storms, the establishment survey was never designed to “isolate effects from extreme weather events.” There is no way to measure the specific impact of the weather from the survey data.

As for the strike at Boeing, the BLS was more certain on that front. Manufacturing employment was down 46,000 last month, with 44,000 of those lost jobs in transportation equipment manufacturing “that was largely due to strike activity.”

The 12,000 job gain in October — again, statistically insignificant — followed average monthly gains of 194,000 over the previous 12 months. That is a big crash.

Healthcare was up by 52,000 jobs, “in line” with the average 58,000 over the previous 12 months. Government employment was up 40,000, which was also in line with its prior 12-month average of 43,000. Temporary help services dropped by 49,000, but that number isn’t unheard of; June saw an equivalent drop. Since a March 2022 peak, temp help services have lost 577,000 jobs, or about 18,613 a month. Construction was up only 8,000, with a 12-month average gain of 20,000 per month. That could easily be a response to weather, though that should rebound with all the rebuilding that will be necessary.

And then, there was little to no change in mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; financial activities; leisure and hospitality; and other services.

So, let’s add some of this up, with an off-average additional loss of 30,387, an unexpected drop of 12,000 from average in construction, and 44,000 down in transportation equipment manufacturing, for a total of 86,397. Add the 12,000 job gains registered and that’s 98,397, which is much closer to the expected 110,000.

No telling how much of these losses had been anticipated by economists as part of the prediction of 110,000 but no telling how few as well. It’s likely going to take a month or two at least to find out what happened.

Data changes have been lagging month over month from establishments. August was revised up in September from 142,000 to 159,000. In the October report, August was revised down by 81,000 to 78,000. September itself was revised down by 31,000 from 254,000 to 223,000.

At the heart of the issue is that the data is only as good as the number of surveyed companies responding and they’ve been responding at lower rates over the years. The graph below shows the three collection dates by years. Numbers for the 2024 rounds are averages of those available. Second rounds for that year are only the average through September and third rounds, only through August.

The higher the percentage on the first collection date, the more information there is and the more correct the totals. But there is no legal compulsion for companies to respond and no assurance that companies reporting late have more jobs to report. Cumulative data should be more accurate, but it doesn’t mean the totals are going to be higher. It only means that more of the responses are in. They can still disappoint. That is exactly what has been happening, making the early reports more inaccurate over the years.

As for the October numbers, it will likely not be until that third collection point that the results will be more telling. There is a chance that the labor market is sliding more than the Fed has assumed. The impact on interest rates — to be seen.