Economists warn: October non-farm payrolls are unreliable, investors are likely to be disappointed!

The U.S. employment report released on Friday may be disappointing. This is the warning issued to investors by economists and some Federal Reserve officials ahead of the latest round of employment data set to be released on November 1. Due to a series of unusual events, including a large-scale worker strike at Boeing and two superstorms affecting the southeastern United States, this may drag down the overall employment numbers, making the employment report particularly difficult to interpret. This will make it harder for market observers to gain clear information about the labor market at a time that Federal Reserve officials refer to as a "turning point" for the U.S. economy. The data will also be released just days before the presidential election, which has already made employers anxious. "The October employment report is going to be a mess," said Callie Cox, chief market strategist at Ritholtz Wealth Management. "I don't think we're going to get any signals, which is really frustrating." Several economists have indicated that they expect the Boeing strike and the damage caused by Hurricanes Helen and Milton to impact the employment growth data for October. Strikes can have uncertain and somewhat complex effects on Labor Department data. Companies may report striking workers as a reduction in employee numbers, while the striking workers themselves may indicate that they are still employed but temporarily absent from work—this is different from being unemployed. In the past, large strikes have pulled down employment numbers. For example, a major strike involving 45,000 Verizon employees in August 2011 led to this situation. As of Saturday, the Boeing strike has entered its seventh week, involving about 33,000 factory workers in Washington, Oregon, and California. Considering that the average monthly job growth over the past year has been 200,000, the work stoppage could cut the net job gains. Then there are Hurricanes Milton and Helen. These two hurricanes caused significant damage in the Appalachian Mountains and along the Florida coast, shutting down businesses there and temporarily leaving some residents unemployed. Before the employment report is released, a Federal Reserve official has already warned that recent economic data should be viewed with caution. "Interpreting the October employment report won't be easy," said Federal Reserve Board member Waller in a speech on October 14. He indicated that the hurricanes and strikes could reduce the overall numbers by as much as 100,000 jobs—he described this impact as "significant but temporary." Earlier this month, at an event in New York, San Francisco Federal Reserve President Daly spoke about how to deal with the noise and revisions in recent economic data. "Data is always revised," she said. "But during this turning point or period of change in the economy, revisions tend to increase." Daly also emphasized that her view of the labor market does not rely on a single data point, such as monthly employment figures. "There are always some labor market indicators that will experience some volatility," she told reporters. The Federal Reserve has only recently shifted its focus from controlling inflation to monitoring weakness in the labor market But the better-than-expected data over the past few weeks has helped investors feel reassured about the direction of the U.S. economy, actually reducing the significance of the new data, said Kayla Bruun, chief economist at Morning Consult. "It doesn't feel as pressured as it did during the September report," she said. "What we're mainly seeing is more positive data rather than negative data." Cox stated that she will be closely monitoring the latest data regardless. She said, "Right now, my biggest concern is the job market. It's hard to say when it will collapse—but we know that once it does, it will happen quickly."