General Motors strike to negatively impact U.S. October job growth

by SpeedLux
General Motors

A strike by General Motors employees should weigh on U.S. job growth in October, government data revealed on Friday.

The Labor Department’s monthly strike report revealed 46,000 General Motors workers were idle at the automaker’s plants in Michigan and Kentucky during the October payrolls count. Striking employees who do not receive a paycheck during the period are treated as not employed.

The figure published by the government is only for striking employees. The GM strike by members of the United Auto Workers (UAW) union started on September 16, with ripple effects on the auto industry that economists stated bumped up claims for unemployment benefits early in October.

The strike depressed manufacturing result in September.

Drawing comparisons with the 1998 strike at GM, economists expect the current work stoppage to slash between 75,000 and 80,000 jobs from October nonfarm payrolls. The estimates consists of industry layoffs associated with the GM strike.

“The effects of this strike would wipe out majority of September’s job growth,” stated Brad McMillan, chief investment officer at Commonwealth Financial Network. “This is a crash we can see coming, but it is one that will be temporary.”

The government is going to publish its closely observed employment report for October next Friday. Payrolls boosted by 136,000 jobs in September, below the monthly average of 161,000 in 2019. The three-month average gain in private employment dropped to 119,000, the smallest since July 2012, from 135,000 in August.

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