Slower Than Expected Job Growth in September

Gladys Abbott
October 8, 2018

Last month's job gains would probably have been stronger absent the effects of Hurricane Florence, which impacted especially retail and the leisure and hospitality sectors.

The U.S. economy added 134,000 jobs in September below analysts' expectations while the unemployment rate was 3.7 percent, the lowest since 1969.

There is little sign that President Donald Trump's trade wars could threaten the recover as manufacturing added 18,000 jobs. After upward revisions to previous months' numbers, job gains have averaged 190,000 per month over the past three months, more than enough to keep unemployment on a downward trend. "The economy's running full speed ahead".

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The historically low US unemployment rate fell again during the month of September, but about 50,000 fewer jobs were added to the economy than experts predicted. Hourly pay edged up 0.3 percent for the month, and is 2.8 percent higher than the same month a year ago, a notch above inflation. Ambulatory healthcare services added 10,300 jobs in September, while nursing and residential care facilities added 3,400 jobs. Gains or losses are calculated via the Current Employment Survey of 147,000 business establishments, while the unemployment rate is based on the Current Population Survey of 60,000 households.

Markets widely expect the central bank to raise rates again in December but some analysts say markets may not have taken the Fed's expectations for next year - another three increases - into account, potentially leaving them in for a rude shock. Bond prices fall when yields rise. Often when wages increase, employers may begin to use more automation or equipment to reduce human labor requirements. But wage increases so far have been modest, something that puzzles economists but allows the Fed to move gradually. Across education levels, unemployment rose by 0.6 percent for those with less than a high school education and by 0.3 percent for those with partial education.

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