Storms and strikes are likely to muddle the October jobs report, but so is another complicating factor: uncertainty about the presidential election, which some executives suggest has put a damper on hiring, too.
There are signs that some companies have been pausing hiring until the outcome is known of the close-run contest between candidates with sharply divergent policy platforms. That has the potential to weigh on the jobs numbers for October, though to what degree is unclear.
The latest edition of the Federal Reserve’s Beige Book, a largely anecdotal compilation of reports about the economy from across the country, hinted at hesitancy among employers.
“Hiring was subdued and was largely for replacement rather than growth, as businesses remained hesitant to make hiring decisions because of uncertainty surrounding the presidential election,” the Fed’s New York district reported. In the Minneapolis region, several business leaders also acknowledged “some hiring caution” linked to uncertainty around next week’s election, the Fed said.
Mark Begor, the chief executive of Equifax, a credit reporting company, said on an earnings call in October that background screening volumes had pointed to reduced hiring among employers in recent weeks.
“Coming into the election, it feels like companies are being a little more prudent,” he said.
Other executives have pointed to a dip in business activity tied to election uncertainty that could temporarily make companies less eager to hire. Jeffrey D. Lorenger, the chief executive of HNI Corporation, an office furniture manufacturer, said on an earnings call this week that election concerns were factoring into small businesses’ reluctance to spend. He said he expected that wariness to “moderate” after the election and into next year.
U.S. manufacturing activity contracted in September for the sixth consecutive month, according to a survey of purchasing managers by the Institute for Supply Management. Companies “showed an unwillingness to invest in capital and inventory,” Timothy R. Fiore, chair of the institute, said in a statement, citing election uncertainty and interest rates as factors.
An October survey by the National Association for Business Economics found that about 30 percent of members delayed hiring or investment decisions at their firms pending the outcome of the vote. But Selma Hepp, the chair of the survey, said in a statement that the election did not appear to be the driving force behind hiring decisions for most firms.
After all, businesses added 254,000 jobs in September, far surpassing forecasts and pointing to strength in the labor market.
Amy Friedrich, president of benefits and protection at Principal Financial Group, said her recent conversations with companies — mostly small and midsize employers — indicated that the election was not among their top concerns when thinking through hiring decisions.
“They’re staying the course for what makes good sense for their business,” she said.
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