Published: Sun, October 07, 2018
Business | By Eloise Houston

Unemployment rate falls to 49-year low

Unemployment rate falls to 49-year low

The Bureau of Labor Statistics reported that the unemployment rate for September had decreased to 3.7 percent, the lowest rate since 1969.

U.S. non-farm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment.

Economists expected only a marginal impact on payrolls from Hurricane Florence, which lashed South and North Carolina in mid-September.

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. Economist Justin Wolfers said September's data pushes up annnualized wage growth to a healthy 3.8%.

That higher pay is likely to trim corporate profit margins, however.

"The markets could give this a little bit of a pass cause it's not clear what impact the hurricane had at the moment". Over the course of this year, recruiters have been more open to job candidates they may before have overlooked, such as those with criminal histories. The U-3 unemployment rate hit a 49-year low as more than a quarter-million people left the ranks of unemployed workers. However, the so-called real unemployment rate, which factors in discouraged workers who take part-time jobs for economic reasons, climbed to 7.5 percent. Pointing to the economy's health, the Fed last week raised its benchmark short-term rate and predicted that it would continue to tighten credit into 2020 to manage growth and inflation. This is particularly true for retail and shipping companies, which are starting to increase hiring for the holiday shopping season.

Americans have continued spending steadily and appear to be in generally stable financial shape.

For now, consumers, business executives and most economists remain optimistic.

Barrera said she has also seen data that show more people are going straight from not being in the labor force to being employed, bypassing the "unemployed" status altogether. So far this year, monthly job growth has averaged 208,000, compared with 182,000 last year. Sales of existing homes have fallen over the past year, held back in part by higher mortgage rates. Increasingly expensive houses, higher mortgage rates and a shortage of properties for sale are slowing purchases.

Economists say there is no indication the labor market is expected to weaken anytime soon. Auto sales have also slumped.

The US and China had already imposed tariffs on $50 billion worth of each other's goods.

"That said, 134,000 job is far from a bad employment number and with August's being revised up by another 69,000, the labour market looks extremely healthy and provides further evidence of a booming economy". The drop in the jobless rate reinforced expectations for a fourth interest-rate hike by the Federal Reserve this year and several more in 2019 as President Donald Trump's tax cuts boost jobs, even as worker pay remains relatively tepid and the trade war with China poses risks.

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