Weak September job growth, but unemployment rate falls to lowest since 1969
- Author: Eleanor Harrison Oct 08, 2018,
Oct 08, 2018, 0:37
The U.S. economy added 134,000 jobs in September, driving the unemployment rate further below previous months' numbers to 3.7 percent, the lowest level since 1969, according to Friday's September Jobs Report released by the Labor Department.
The labor market slowed substantially in September as employers added 134,000 jobs in a possible sign that worker shortages and US trade skirmishes are starting to take a bigger toll on hiring. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.
The unemployment rate leaves out workers who haven't sought a job in the past four weeks.
With September's increase below the 0.5% gain recorded during the same time last year, that lowered the annual increase in wages to 2.8% from 2.9% in August, which was the biggest rise in more than nine years. This will be the first time since the 2008 financial crisis. Americans from a wide range of demographic groups have benefited from the longest streak of hiring on record.
By almost any measure, today's labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. For close to two-thirds of the United States population, this is the lowest unemployment rate in their lifetime. And Americans with only a high school diploma recorded their best unemployment rate since 2001.
The FOMC will continue to gradually raise the fed funds rate in 2019 as the job market continues to tighten. "These really are the good times". This not only deflated the monthly payroll change, it also showed up in outsized wage pressures for the construction and utility sectors. Almost 300,000 workers told the BLS that bad weather kept them away from their jobs, most likely in industries like hospitality in which they're paid only if they show up.
The long-awaited pickup may already have begun. Online retail giant Amazon announced this week that it would raise its minimum wage to $15 per hour for US employees starting in November.
If the economy continues to perform, that bodes well for a Federal Reserve interest rate hike for December and two to three more hikes next year, North said.
So far, there isn't much evidence of that happening.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, dropped 0.2 percent in August instead of rising 0.1 percent as reported last month.
Why? The short answer: The economy is good. However, Hurricane Florence barely left a mark on the data for September.
Florence-related flooding and damage in North Carolina and SC was expected to influence the data, though on a smaller scale than the 2017 disruptions from hurricanes Harvey and Irma.
The Labour Department said 299 000 people weren't at work due to bad weather, reflecting the storm's impact.
Last year, the storms that hit Florida and Texas wreaked havoc on September's employment data.
August's job gains were also revised significantly higher in Friday's report, with the BLS now estimating the economy created 270,000 jobs in August, 69,000 more than previously estimated.