US Unemployment Rate Falls To 49-Year Low Of 3.7 Percent

Andrew Cummings
October 7, 2018

July's numbers were revised up to 165,000 jobs from the previous estimate of 147,000; at the same time August's job number was revised up to 270,000 from the initial estimate of 201,000. For 2018 so far, healthcare jobs have increased by 302,000.

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8%. Retail payrolls dropped by 20,000 jobs in September amid widespread declines across the sector.

USA financial markets were little moved by the report.

In looking ahead to next month, when Florence's possible effects may be less daunting, a new problem may arise. "It's going to reinforce the Fed's path for raising rates". The Labor Department said claims for North and SC continued to be affected by the storm. Data-collection rates were within normal ranges for both surveys. With unemployment so low, companies are facing intense pressure to raise pay to land workers. That category saw an 18 200 decrease in payrolls, according to the report. That reversed the increase from the prior week when claims were boosted by Hurricane Florence, which slammed North and SC in mid-September. The data beat expectations as economists forecasted a drop to 3.8%.

Meanwhile, the labor market faces other challenges.

Here's what else you should know about the latest jobs report.

Applications fell to 202,000 during the week ended September 15, which was the lowest level since November 1969. Job growth is set to slow next year as an inability to find workers weighs on hiring. Hiring data may show storm- related swings for October too, economists said. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000. That's consistent with other reports showing strength in such activity.

Healthcare employment rose by 26,000 in September.

Many major employers announced pay increases in recent months, but those have yet to significantly move the needle nationally on average hourly earnings, which haven't topped 3 percent growth yet in this expansion. The annual advance of 2.8% followed a 2.9% gain in August.

Another number that provides some insight is weekly wages. The average work week was unchanged at 34.5 hours, department figures showed. A shorter workweek has the effect of boosting average hourly pay.

The tightening of the labor market is leading to a more visible acceleration in wages.

Shipments of core capital goods, which are used to calculate business equipment spending in the GDP, dropped 0.2% in August instead of rising 0.1%, as reported last month. It has also started calling back people who previously applied for jobs but weren't hired. The second answer: Not as many people are in the labor force, so they aren't counted in the unemployment rate. The employment- population ratio, another broad measure of labour-market health that central bankers like to watch, rose to 60.4% from 60.3%. 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.

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