A sharply weaker jobs reading has thrown up some uncertainty about the direction of the U.S. economy. But the preponderance of evidence from official data, company earnings and even consumers points to a strong, if gradually slowing, economy. 

There was even more attention than usual on Friday’s jobs figure, coming as it did just days before the presidential election and the Federal Reserve’s next rate-setting meeting. But no one should panic about the October employment report, which showed the economy adding just 12,000 jobs for the month. There were multiple distortions bringing it down, including a strike at Boeing and two major hurricanes. These affected not only the number of people working but also the survey collection methods of the Bureau of Labor Statistics. Attempting to divine from this figure how the economy is performing at a macro level would be foolhardy. 

Perhaps more worrying would be the downward revisions in estimates for job growth in August and September, by a combined 112,000. But even after taking these into account, the trend through September looks mild.

In the three months through September, the economy added an average of 148,000 jobs a month, basically unchanged from 147,000 through June. That is down from an average of 267,000 jobs a month in the three-month period through March, but this pace of deceleration is actually consistent with what the Federal Reserve wants to see, to be reassured that inflation pressures will remain on a downward path. 

Doubts about the reliability of the October jobs report should lead interested observers to look at other indications of the economy’s health. An obvious one is gross domestic product. Data released on Wednesday showed that it grew at a respectable 2.8% annual rate in the third quarter, adjusted for seasonality and inflation, down only slightly from 3% the prior quarter. 

Another useful indicator is also currently at hand: Markets are currently in the middle of earnings season, when the bulk of publicly-listed American companies report their results for the quarter ending in September. They have been highly encouraging. 

Among S&P 500 companies that had reported through Oct. 31, earnings were up a robust 8.4% from a year earlier, according to an analysis by LSEG I/B/E/S. Excluding the volatile energy sector, which is being hit by lower oil prices, earnings were up 11.2%. Earnings were on average 7.8% better than estimates, far better than the historical average of 4.2%. Revenue growth was 4.8%, or 5.9% excluding energy. 

A prominent feature of the economy over the past year or so has been the “vibecession,” whereby individuals’ feelings about the economy are trending far worse than official data would suggest. But even the vibes seem to be improving.

The Conference Board’s Consumer Confidence Survey, released on Tuesday, jumped in October to its highest monthly level since March 2021. A competing survey of consumer sentiment from the University of Michigan also ticked up in October to its highest reading since April. Inflation expectations in that survey were in line with the two years prior to the pandemic. 

During JPMorgan Chase’s quarterly earnings conference call, Chief Financial Officer Jeremy Barnum said the bank’s analysis of its own clients’ spending patterns suggest consumers have cut back some of the splurging they did on vacations and cruises after the pandemic ended. But he added that other discretionary categories like retail spending haven’t slowed. This is partly why the bank’s “central case” expectation for the economy isn’t so much a soft landing but a “no landing scenario” whereby strong growth continues, he said. 

All this helps explain why long-term interest rates such as the 10-year Treasury yield have been rising in recent weeks and actually ticked higher on Friday. Traders are still pricing in overwhelming odds of two more quarter-point rate cuts this year. But the outlook for next year is getting hazier. The most likely scenario, according to Fed funds futures markets, is now that the Fed’s target rate will be a full percentage point lower by its meeting in June 2025 compared with now, according to the CME FedWatch tool. One month ago, bets centered around 1.5 to 1.75 percentage points of cuts by then. If the economy keeps its recent performance, there may be no need for any rate cuts at all next year.

Don’t miss the forest for the trees: A one-off miss in jobs doesn’t change the overwhelming message being sent from many sources. The American economy is in good health.