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USA jobless rate falls to 49-year low

08 October, 2018, 00:41 | Author: Melinda Barton
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The U.S. unemployment rate fell to 3.7 percent in September - the lowest level since December 1969 - signaling how the longest streak of hiring on record has put millions of Americans back to work.

The Labor Department said Hurricane Florence may have impacted jobs results, with leisure and hospitality employment down slightly after trending upwards over the last several months.

Take extra care interpreting September's jobs figures because of Hurricane Florence, which hit the Carolinas in the middle of the month. A category that includes restaurants, hotels and casinos lost jobs for the first time since last September, when Hurricane Harvey exerted a similar effect.

Average hourly earnings rose 8 cents to $27.24, lowering the annual gain to 2.8 percent from a nine-year high of 2.9 percent in August.

The economy has now added jobs for almost eight straight years. This is the lowest unemployment rate since December 1969.

There was a huge upward revision to job growth in August, to 270,000 from 201,000, and an upward revision to job growth in July to 165,000 from 147,000, for a combined upward revision of 87,000. About 1.5 million employees worked part-time because of the weather last month.

Consumers, business executives and most economists remain optimistic.

The Federal Reserve approved the third rate increase of the year, last month. Retail payrolls dropped by 20,000 jobs in September amid widespread declines across the sector.

The unemployment rate for September dropped two-tenths of a point from August to 3.7 percent, according to the Bureau of Labor Statistics. This is a bit slower than the 2.9 percent year-over-year wage growth in August, but competition for workers is pushing up pay, consistent with the findings from PNC's semiannual small business survey, released earlier this week. But wage increases so far have been modest, something that puzzles economists but allows the Fed to move gradually.

Following Friday's release Michael Pearce, senior US economist at Capital Economics, said the report is likely to affirm the Fed's plans to continue raising interest rates gradually, adding that wage is now on track to climb above 3% by the end of 2018. Manufacturers expanded their payrolls by 18,000. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the USA and China, that does not appear to have affected hiring. The trade gap surged 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. President Donald Trump's administration has imposed tariffs on imported steel and aluminum as well as on roughly half of China's imports to the United States.

The trilateral trade agreement between the US, Canada and Mexico was salvaged in an 11th-hour deal on Sunday. Job growth has repeatedly defied economists' predictions of a slowdown. And Americans with only a high school diploma recorded their best unemployment rate since 2001.



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