Job gains miss expectations, unemployment rate hits 49-year low

Job gains miss expectations, unemployment rate hits 49-year low

Job gains miss expectations, unemployment rate hits 49-year low

Job applicants talked with representatives from Aldi, June 21, at a job fair hosted by Job News South Florida, in Sunrise, Fla.

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

"The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence", said Michael Pearce, senior USA economist at Capital Economics in NY.

Hurricane Florence, the storm that made landfall along the mid-Atlantic US coast on September 14, caused widespread disruption for homes and employers but it was not possible to determine the extent to which this might have depressed the September jobs numbers, officials said.

USA job growth slowed sharply in September as Hurricane Florence depressed restaurant and retail payrolls. The strength of that gain, if it can be sustained, would suggest that the low unemployment rate is pressuring more companies to raise pay in order to attract and keep workers. Still, it extended an extraordinary 8½-year streak of monthly job growth, the longest on record. So far this year, monthly job growth has averaged 208,000, compared with 182,000 last year.

"The acceleration in job gains this year is extraordinary in an environment where firms are having great difficulty finding qualified candidates", said Stephen Stanley, chief economist at Amherst Pierpont Securities. Average weekly wages rose at an impressive 3.4 percent over previous year.

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This is the lowest unemployment rate since 1969.

Earlier this week, Amazon announced that it was raising its minimum wage to $US15 an hour, more than twice the federal mandate of $US7.25. "We'll see in earnings season how much of an impact it will have on profit markets as labor is a business's biggest cost". Investors have grown concerned about higher interest rates and the effect they might have on the economy and the stock market.

The Fed's hikes might be starting to bite.

Consumers, business executives and most economists remain optimistic. 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.

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

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"Businesses of all sizes are indicating they are doing whatever they can to keep their workers", said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. Temporary health services contributed 10,600 of those positions.

Americans have continued spending steadily and appear to be in generally stable financial shape. But the more-inclusive "underemployment" rate (technically U6), ticked up to 7.5% from 7.4%.

The last time the general unemployment rate was this low, millions of men had been drafted for the Vietnam War, and, therefore, taken out of the labor force.

So far this year, the average number of jobs created each month is 16 percent higher than last year.

The weakness in payrolls last month is not corroborated by other labor market data.

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