Published: Sun, October 07, 2018
Money | By Arnold Ball

United States job growth slows but unemployment rate falls to 3.7%

United States job growth slows but unemployment rate falls to 3.7%

"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.

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.

The low unemployment rate provided more evidence of a booming economy, which is now in a record eight-year streak of job gains.

U.S. hiring cooled in September by more than forecast, wage gains eased slightly and the jobless rate fell to a 48-year low, illustrating a tight labour market as well as the impact of Hurricane Florence.

Data for the prior week was revised to show 1,000 more applications received than previously reported.

So far this year, the average number of jobs created each month is 16 percent higher than last year. The unemployment rate is forecast falling 1/10th pt to 3.8%, an 18-year low 1st hit in May.

The report, which was released on Friday, said that the American economy was humming with the GDP on pace for its best year since the housing the mid-2000s, reports The New York Times.

Most analysts blamed the slower pace of hiring last month on Florence, which struck North and SC and closed thousands of businesses. "I would view this as a full-employment jobs report", Alan Krueger, a Princeton University economics professor and former head of the White House Council of Economic Advisers under Barack Obama, said on Bloomberg Television.

The fallout from Florence was apparent in employment at restaurants and bars, an industry where most workers only get paid if they show up to work.

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Numerous dislocated people will probably return to work. That largely offsets the weak September showing.

Job creation for September fell to its lowest level in a year though the unemployment rate dropped to a point not seen in almost 50 years, according to Labor Department figures released Friday.

In the past four quarters, average hourly earnings increased by 2.8% and accelerated to 3.1% in the past two quarters.

While unemployment remains low, wages grew 2.8 percent in September, a slight disappointment after 2.9 percent growth in August, which was the highest in nine years.

Wages have grown 2.8 percent over the a year ago, down from last month's estimate of 2.9 percent. As more slack is squeezed out of the labour market, economists expect annual wage growth to hit 3 per cent. The average workweek was unchanged at 34.5 hours.

In fact, the Fed's latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60bn worth of USA products. The United States and China had already imposed tariffs on $50 billion worth of each other's goods. The United States has since struck a trade deal with Canada and Mexico.

Jobs in professional and business services rose by 54,000 in September and has increased by 560,000 over the year.

Nonfarm payrolls likely increased by 185,000 jobs last month after surging 201,000 in August, according to a Reuters survey of economists.

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