African American jobless rate hit record low in August

Andrew Cummings
September 10, 2019

HydraForce Inc. employees work in the firm's plant in Lincolnshire, Ill., on January 10, 2018. The weakness was flagged by the report on Tuesday from the ISM showing its gauge of factory employment dropped in August to its lowest level since March 2016.

Federal Reserve Chairman Jerome Powell said Friday that the FOMC's pivot this year to lower interest rates has helped sustain USA economic growth. The U.S. central bank lowered borrowing costs in July, citing growing risks to the economy from the trade fight and slowing global growth. China and the United States on Thursday agreed to hold high-level trade talks in early October in Washington, according to the Chinese commerce ministry.

President Donald Trump tweeted Friday that "The Economy is great". "Don't count the economy out yet".

The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 1,500 to 216,250 last week. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of USA economic activity.

Payroll gains were weaker than expected in August, and prior months were downwardly revised, but there were some important silver linings in the report, including a rebound in the workweek and at least a temporary halt in the deceleration of aggregate income growth.

"Extreme uncertainty over trade issues has soured the sentiment of some in the business community, but companies continue to hold on tight to the workers they have and are also onboarding new workers at a fast clip", said Chris Rupkey, chief economist at MUFG in NY.

The reports and news that Washington and Beijing had agreed to resume trade talks next month propelled USA stock indexes to more than a one-month high.

Those were not good numbers for USA president Donald Trump, who is relying on the economy to help him make his case for a second term in office in 2020. The economy created 20,000 fewer jobs in June and July than previously reported.

Employment in federal government rose by 28,000 in total in August. Export orders, however, fell as did imports. The temporary help sector added 15,400 jobs, its largest gain since May of 2017. Wholesale trade was the only industry reporting a decrease in growth. The average workweek fell to its lowest level in almost two years in July as manufacturers and other industries cut hours for workers.

US Stocks were mixed on Friday as sentiment eased into the close following the US payroll report. Private sector employment increased by just 96,000 in the month, bringing the average gain in the private sector for the last three months to 130,000. The anticipated job gains would be below the monthly average of 165,000 over the last seven months, but still above the roughly 100,000 per month needed to keep up with growth in the working age population.

The market had been expecting the jobless rate to remain steady, though with the addition of 165k jobs.

The unemployment rate is forecast unchanged at 3.7% for a third straight month.

Labor market resilience was also underscored by a third report from the Labor Department on Thursday which showed initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 217,000 for the week ended August 31.

Other reports by iNewsToday