US October nonfarm payrolls seen taking a hit from striking aerospace, hotel workers
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By Lucia Mutikani
WASHINGTON, Oct 25 (Reuters) - U.S. nonfarm payrolls in October could be reduced by as many as 41,000 jobs amid strikes in the aerospace manufacturing industry and at three hotel chains,government data showed on Friday.
The Labor Department's monthly strike report showed 33,000 Boeing BA.N employees were idle at the planemaker's plants in California, Oregon and Washington state during the October payrolls survey.
Another 5,000 members of the International Association of Machinists and Aerospace Workers, the union representing the Boeing factory workers, were also on strike at Textron, an aircraft company, in Kansas.
The report also showed 3,400 workers walked off the job at Hilton, Hyatt and Marriott hotels and motels in California and Hawaii. Striking workers who do not receive a paycheck during the period that the government surveys business establishments for the employment report are treated as unemployed.
The payrolls impact from the Boeing labor strife could be larger amid reports of some of the company's suppliers furloughing or laying off workers.
The labor market is expected to also have taken another hit from Hurricanes Helene and Milton, which are estimated to have cut up to 40,000 jobs from payrolls in October.
Preliminary results of a Reuters survey of economists estimate nonfarm payrolls increased by 125,000 jobs this month after surging 254,000 in September. The unemployment rate is seen unchanged at 4.1%.The employment report for October will be published on Nov. 1, just days before the U.S. election.
Economists believe that Federal Reserve officials will brush aside October's employment report when they meet on Nov. 6-7.
The rise in the unemployment rate from 3.4% in April 2023 to 4.3% in July this year was the trigger for the U.S. central bank's unusually large 50-basis-point rate cut last month.
The first reduction in borrowing costs since 2020 lowered the Fed's policy rate to the 4.75%-5.00% range. The Fed hiked rates by 525 basis points in 2022 and 2023 to curb inflation. It is expected to cut rates by 25 basis points next month.
The Boeing strike, which has halted production of its best-selling 737 MAX as well as 767 and 777 wide-body programs, helped to depress industrial production in September. The strikers on Wednesday rejected a contract offer.
Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci
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