Autos

General Motors strike to hit US October job growth

Key Points
  • A strike by General Motors will likely slash at least 46,000 jobs from October's nonfarm payrolls, a Labor Department report showed on Friday.
  • The departments monthly strike report showed a total of 46,000 General Motors employees were idle at the automaker's plants in Michigan and Kentucky during the survey period of the October payrolls count.
  • Striking workers who do not receive a paycheck during the reference period are treated as unemployed.
United Auto Workers union members and their families rally near the General Motors Flint Assembly plant on October 13, 2019 in Flint, Michigan.
Bill Pugliano | Getty Images

A strike by General Motors will likely slash at least 46,000 jobs from October's nonfarm payrolls, a Labor Department report showed on Friday.

The department's monthly strike report showed a total of 46,000 General Motors employees were idle at the automaker's plants in Michigan and Kentucky during the survey period of the October payrolls count.

Striking workers who do not receive a paycheck during the reference period are treated as unemployed. The government will publish its closely watched employment report for October next Friday.

The workers, who are members of the United Auto Workers (UAW) union, went on strike on Sept. 16, with ripple effects in some other parts of the auto industry that have led economists at JPMorgan to expect the work stoppage will reduce employment growth by as much as 75,000 this month.

GM and the UAW reached a tentative deal last week. The union, however, said workers would stay off the job while they vote on the proposed 4-year contract. Voting that could end the strike was expected to conclude on Friday.

Though likely to be temporary, a small gain in payrolls could rattle financial markets already on edge following slower job growth in September. Payrolls increased by 136,000 jobs last month, below the monthly average of 161,000 this year. The three-month average gain in private employment fell to 119,000, the smallest since July 2012, from 135,000 in August.

According to a preliminary Reuters survey of economists, payrolls likely increased by 90,000 jobs in October. The household survey from which the unemployment rate is derived would likely consider the striking workers as employed. Still, economists are forecasting the unemployment rate rising to 3.6% this month from a near 50-year low of 3.5% in September.

A raft of weak data, including September retail sales, durable goods orders and manufacturing production, have also cast a shadow on the longest economic expansion on record.

The expansion, now in its 11th year, is being hamstrung by a 15-month trade war between the United States and China, which has eroded business confidence and weighed on business investment. The strike depressed manufacturing output in September.

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Key Points
  • The UAW filed the lawsuit in February, three months after GM announced plans to "unallocate" and potentially close up to four U.S. plants.
  • The union argued GM was in breach of its 2015 contract with the UAW. The company has denied such allegations.
  • The UAW's 48,000 members with GM are voting on the tentative agreement through Friday.