US job­less rate hits 49-year low of 3.7%

The Malta Business Weekly - - INTERNATIONAL -

The US unem­ploy­ment rate fell to 3.7% in Septem­ber, the low­est rate since De­cem­ber 1969.

Fig­ures from the De­part­ment of La­bor also showed the US econ­omy cre­ated 134,000 jobs dur­ing the month, fewer than were ex­pected.

Sig­nif­i­cant jobs growth was seen in pro­fes­sional and busi­ness ser­vices, health­care and con­struc­tion.

Av­er­age hourly earn­ings rose at an an­nual rate of 2.8% in Septem­ber, down from 2.9% in Au­gust.

Em­ploy­ment data for July and Au­gust were also re­vised to show an ad­di­tional 87,000 jobs were cre­ated than first re­ported.

Hur­ri­cane Florence, which bat­tered the US East Coast in midSeptem­ber, was cited by the La­bor De­part­ment as a fac­tor for some em­ploy­ment changes, specif­i­cally leisure and hos­pi­tal­ity, which lost 18,000 jobs in the pe­riod.

The La­bor De­part­ment said it was "im­pos­si­ble to quan­tify" the hur­ri­cane's net ef­fect on em­ploy­ment.

Jake Rob­bins, from Premier As­set Man­age­ment, said low unem­ploy­ment is driv­ing wages higher.

"Em­ploy­ers are find­ing it harder to re­cruit and hav­ing to pay more when they do," Mr Rob­bins said.

Ian Shep­herd­son, the chief econ­o­mist at Pan­theon Macro­eco­nomics, pre­dicted that the job­less rate will fall as low as 3.25% by this time next year, strength­en­ing the case for the US Fed­eral Re­serve to keep rais­ing in­ter­est rates.

"No one at the Fed thinks unem­ploy­ment near 3% is sus­tain­able," Mr Shep­herd­son said.

Both econ­o­mists pre­dict the US Fed­eral Re­serve will con­tinue to raise in­ter­est rates well into 2019, as bet­ter-paid US work­ers spend more and in­crease in­fla­tion­ary pres­sures.

The es­ca­lat­ing trade war be­tween the US and China does not ap­pear to have af­fected hir­ing in fac­to­ries.

The data showed man­u­fac­tur­ing jobs con­tin­u­ing to mul­ti­ply in Septem­ber, with 18,000 added, re­flect­ing a gain in durable goods in­dus­tries. In 2018 so far, man­u­fac­tur­ing has added 278,000 jobs.

Wash­ing­ton last month slapped tar­iffs on $200 bil­lion worth of Chi­nese goods, with Bei­jing re­tal­i­at­ing with du­ties on $60 bil­lion worth of U.S. prod­ucts. The United States and China had al­ready im­posed tar­iffs on $50 bil­lion worth of each other's goods.

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

Health­care em­ploy­ment rose by 26,000 in Septem­ber. For 2018 so far, health­care jobs have in­creased by 302,000.

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