The unemployment rate is at 3.7 percent, the lowest it has been since 1969, as the economy continues its nine-year expansion, according to the Department of Labor.
The total number of monthly jobs was a disappointment with only 134,000 jobs added in September 2018. This is the lowest monthly total this year, according to the Bureau of Labor Statistics.
Wage growth has been slow for months compared to otherwise robust economic metrics. It has increased to 2.8 percent year after year, indicating that employers have to offer more competitive remuneration to retain and attract workers from a shrinking labor pool.
The Bureau of Labor Statistics’ September survey of households is evidence of a booming U.S. economy. This is the tenth month since 1970 that the unemployment rate has been recorded below 4 percent. Five of these months was in 2018.
Since Donald J. Trump was elected in November 2016, the U.S. economy has created 4.2 million jobs. The first 20 months of this administration showed that job growth is strong. The construction, mining, manufacturing, and logging industries added 900,000 jobs. Retail trade, leisure and hospitality, and other services had job losses in September. The decline in employment in the industry of leisure and hospitality can be attributed partially to the effects of Hurricane Florence.
Mark Hamrick, a senior economic analyst at Bankrate says the positive wage trend should accelerate for workers as long as the patterns of growth and hiring stay intact.
Major storms like Hurricane Harvey have had a negative impact on the Labor Department’s numbers in the past. However, Hurricane Florence barely left a mark on the data for September. The storm did not disable any major cities or economies to the extent that Harvey did in Houston last year.
According to Fiona Cincotta, a senior market analyst at City Index: “the high levels of employment have been feeding wage increases and fueling higher consumer spending to rising inflation. Now the speculation will start if the Federal Reserve will speed up its planned rate hikes this year and next.”
The Federal Reserve approved the third rate increase of the year, last month. This could be an indication that the Reserve may be able to take a back seat soon. This will be the first time since the 2008 financial crisis. Soon the economy may be able to steer itself.
The unemployment rate reached historic lows for multiple demographic groups. The unemployment rate for Hispanics has fallen to 4.5 percent, the lowest ever on record. The unemployment rate for women has fallen to 3.6 percent, which is the lowest rate in 65 years. The unemployment rate for those who have a high school diploma and no college attendance was 3.7 percent, which is the lowest since April 2001. Additionally, September was the first month since December 2000 that the number of unemployed people fell below 6 million.
Markets responded positively to the report. The day before the report was released, the market had one of its worst days as the Dow Jones saw its largest one-day percentage drop since August. The S&P and Nasdaq also saw their biggest drop in more than three months.
By Jeanette Smith
NBC News: Unemployment is at its lowest level in nearly 50 years, new jobs report shows
White House.gov: America’s Unemployment Rate Falls to Its Lowest Level in Almost 50 Years
Featured Image Courtesy of trapexemike’s Pixabay Page – Creative Commons License
Top Image Courtesy of geralt’s Pixabay Page – Creative Commons License