Unemployment Drops to Its Lowest Level Since the 1960s

The American Economy Added Just 134,000 Jobs in September Unemployment Drops to Lowest Level Since 1969		AFP5 Oct 2018

The American Economy Added Just 134,000 Jobs in September Unemployment Drops to Lowest Level Since 1969 AFP5 Oct 2018

The U.S. economy is humming, unemployment is skating near a half-century low and businesses are eager - desperate, in some cases - to hire.

The dollar and Treasury yields fluctuated after the report, with the 10-year rate briefly touching a fresh seven-year high. "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 labour market remains healthy, and we think the Goldilocks scenario of decent economic growth with tame inflation is poised to continue", said Aaron Anderson, head of research at Fisher Investments in San Francisco. This is a bit slower than the 2.9 percent year-over-year wage growth in August, but competition for workers is pushing up pay, consistent with the findings from PNC's semiannual small business survey, released earlier this week. Job growth increased in the household survey (different from the survey of employers) by a large 420,000 in September, while the labor force grew by 150,000. Wage growth entered this year at 2.9% in January and remained the same last month on a year-over-year basis.

Still, higher inflation is offsetting much of the wage gain.

The Labour Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries.

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

The 4-week moving average of initial claims, considered a better measure of labor market trends as it irons out W-W volatility, rose 500 to 207,000 last week. While the data came in weaker than expected, the report noted higher revision in July and August.

Private employment rose by 121 000, compared with a median estimate of 180 000.

Average US hourly earnings increased eight cents, or 0.3%, in September after rising 0.3% in the previous month.

The September jobs report does not change the outlook for interest rates.

The rate remained unchanged in September at 62.7 percent of eligible workers in the workforce, down from a pre-recession rate of 66 percent.

Another number that provides some insight is weekly wages.

Economists will also be eyeing the all-important wage figures, as a tightening USA labor market has pushed pay higher.

With September's increase below the 0.5 percent gain notched during the same period last year, that would lower the annual increase in wages to 2.8 percent from 2.9 percent in August, which was the biggest rise in more than nine years.

The latest drop in the jobless rate puts it further below Fed estimates of levels sustainable in the long run. It has also started calling back people who previously applied for jobs but weren't hired. The rate was actually 7.5 percent in September, when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one.

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