A labor market report to be released this Friday by the U.S. Bureau of Labor Statistics (BLS) will show that the U.S. economy added jobs at a slower pace in October and that the unemployment rate remained steady.

That's according to the consensus estimate among analysts reported by Tradingeconomics.com. It says the U.S. economy added 180,000 jobs in October, down from 336,000 in September, with the unemployment rate remaining steady at 3.8%.

One of the reasons for this slowdown is the string of interest rate hikes in the first half of the year. They have begun to take their toll in the interest rate sensitive sectors of the nation's economy.

Another reason is the multiple worker strikes, including the United Auto Workers (UAW) and the ongoing screen actors (SAG-AFTRA) strike. "The October BLS Strike Report shows an aggregate of 48,000 workers on strike during the month," Kendall Dilley, CFA, CMTPortfolio Manager at Vineyard Global Advisors, told International Business Times.

The U.S Bureau of Labor Statistics treats striking workers as temporary unemployed, distorting the unemployment numbers. "The October Non-Farm payroll may be understated by 48,000 after accounting for the striking workers," explained Dilley. "The unemployment rate is expected to remain unchanged in October at 3.8%. Wage growth is projected to decelerate to 4.0% year-over-year (YoY) compared to 4.2% seen in September."

Andrew Crapuchettes, CEO and founder of Red Balloon, sees a third reason for the weakness in the labor market -- hiring cuts among small businesses.

"The monthly survey we conduct with PublicSq of over 60,000 small businesses indicates that business owners are hunkering down for a potential recession," he told IBT. "Only 13% of these small businesses are hiring to expand. That's the lowest number we've seen since we started the survey back in July.

"Don't be surprised if there is a hiring delineation between big businesses and small mom-and-pop shops. Small business is hurt disproportionately by high-interest rates and inflation."

Julia Pollak, Chief Economist, ZipRecruiter, strikes an optimistic tone. She thinks the underlying rate of job growth has been remarkably steady -- and rapid -- at around 250,000 to 260,000 jobs added per month all year.

"Hiring has slowed in recent months, but turnover has slowed more, so the net effect has been continued growth in payrolls," she elaborated. "Despite somewhat sluggish online hiring activity, we expect that October will extend the recent trend and that job growth will align with the 260,000 year-to-date average and the 266,000 average in the most recent quarter."

Joseph Camberato, CEO of National Business Capital, is on the optimistic side, too. "I bet we'll see the October jobs report come in higher than expected," he told IBT. "The economy seems to be chugging along steadily, and there haven't been any major layoffs to throw a wrench in the works. So, my money's on the job numbers exceeding our predictions."

Meanwhile, Pollak expects unemployment to remain steady at around 3.8%, but she sees some risk to the upside due to sluggish hiring. "It is making it harder for some groups of unemployed workers to find jobs and leave unemployment rolls," she explained.

"From a market perspective, we're likely to see relief if the reading comes in close to expectations, but if we see another hot reading, this could heighten concerns that the Fed may need to do more to cool the economy," added Michelle Cluver, Portfolio Strategist at Global X.

Jim Smigiel, Chief Investment Officer for SE, is concerned about the impact of a hot reading on monetary policy, too. "Another strong report should be enough fuel to fire a rate hike in December," he told IBT. "One wrinkle here is the settlement of the UAW strike with Ford, which led to substantial wage gains for Union workers. That may be on policymakers' minds as they digest last month's data."

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