October Jobs Report Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in October.  

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“The first employment report for the fourth quarter showed a notable slowdown in the labor market, with an increase of only 12,000 jobs for the month. There were increases in government and health care sector gains and job losses in temporary help and manufacturing. Beyond this slowdown in October, job gains from the prior two months were revised down by a cumulative 112,000 jobs. 

“While the unemployment rate was unchanged for the month at 4.1%, the household survey did show a 368,000 decrease in employment, with an estimate that more than 400,000 individuals left the labor force as job seekers pulled back from the market in the face of a slower pace of hiring across the country. This continues a theme we have seen in recent months, where the labor market is not seeing large layoffs but instead an ongoing reduction in job openings and a reluctance by employers to add workers. That said, wage growth remained steady at a 4% annual rate.

“MBA is forecasting a slowdown in the pace of economic growth beginning in this quarter and extending through 2025 and expects that the Federal Reserve will respond by continuing to cut rates at a steady pace over the next year. Longer-term rates, including mortgage rates, have largely priced in this expected path by the Fed, but today’s news is likely to bring mortgage rates somewhat lower as it adds more evidence that the economy is on a path to slower growth.”