USA unemployment rate falls to 3.7 pct in September

08 October, 2018, 06:20 | Author: Brooke Harris
  • U.S. Employment Rises Much Less Than Expected In September

Last month marked the 97th consecutive month of this job growth. I expect the unemployment rate to hold at 3.9 percent. This probably won't be the month to learn that lesson, however.

Despite the added jobs, the unemployment rate was up 0.2 percentage points to 5.5 per cent, with 1,300 more working-age people unemployed than past year in September.

"No-one at the Fed thinks unemployment near three percent is sustainable", Ian Shepherdson of Pantheon Macroeconomics said in a client note. The U-6, or underemployment rate, edged up to 7.5 percent from 7.4 percent.

Analysts on average had expected a decline of unemployment to 3.8% in September, however, the statistics exceeded expectations.

Hurricane Florence, the storm that made landfall along the mid-Atlantic US coast on September 14, caused widespread disruption for homes and employers but it was not possible to determine the extent to which this might have depressed the September jobs numbers, officials said. Growth was not even across all sectors, with leisure and hospitality seeing a loss of jobs to the tune of 18,000. According to analysis by the BBC, the biggest growth in US job sectors was in professional and business services, healthcare and construction. Our research shows that the potential labor supply is sizable and elastic, especially along prime working-age persons.

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And many analysts see the unemployment rate continuing to decline this year, ramping up pressure on wages and prices. In the past four quarters, average hourly wages have increased by 2.8 percent and accelerated to 3.1 percent in the past two quarters.

The tightening of the labor market is leading to an increase in wages.

Economists forecast another robust month of job gains. The 2018 year-to-date gain is 189,000 compared to 207,000 for 2017.

This job total is a decrease from the 33,200 healthcare jobs added in August but an increase from the 16,700 jobs the industry added in July. Job gains occurred in professional and business services, in health care, and in transportation and warehousing.

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