USA unemployment falls to 3.7 percent - lowest since 1969

Gladys Abbott
October 7, 2018

The headline unemployment rate also dropped to 3.7%-down from 3.9% in August, and 0.1 percentage point below forecasts-the lowest since December 1969 (which was a few months after the great miracles of that year: the moon landing and the Mets' World Series triumph).

Non-farm payrolls data showed that employers created 134,000 jobs last month, the least in a year and below economists' expectations of a gain of 185,000, although the labour department said that some of the weakness could reflect the impact of Hurricane Florence.

Many economists have forecast that Hurricane Florence, which flooded parts of North and SC last month, depressed September's job growth by roughly 30,000. A category that includes restaurants, hotels and casinos lost jobs for the first time since last September, when Hurricane Harvey exerted a similar effect.

In August, average hourly wages rose 2.9 percent from 12 months earlier - the biggest year-over-year increase since the recession officially ended in June 2009. Economist Justin Wolfers said September's data pushes up annnualized wage growth to a healthy 3.8%. Over time, higher borrowing costs make auto loans, mortgages and corporate debt more expensive and can eventually slow the economy. Bond yields rise when prices fall, and they spiked Wednesday to their highest level in over seven years after a strong private-payroll report from ADP and bullish comments from the Federal Reserve's chairman, Jerome Powell.

The U.S. economy is humming, unemployment is skating near a half-century low and businesses are eager - desperate, in some cases - to hire. Households are saving almost 7 percent of their incomes - more than twice the savings rate before the recession. The U-3 unemployment rate hit a 49-year low as more than a quarter-million people left the ranks of unemployed workers. The central bank raised rates last week for the third time this year. That trend suggests that a brighter economic outlook hasn't caused consumers to recklessly build up unsustainable debt.

More news: Fabregas commits future to Chelsea and reveals he wants a new contract

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

The unemployment rate for September dropped two-tenths of a point from August to 3.7 percent, according to the Bureau of Labor Statistics.

Other data show the economy roaring ahead. 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.

"Even though storm effects will be limited by the fact that the hurricane hit relatively late in the survey period, we think they will be enough to bias the workweek down and increase hourly earnings", said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. Auto sales have also slumped. The United States and China had already imposed tariffs on $50bn 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".

Other reports by LeisureTravelAid

Discuss This Article