U.S. Unemployment Rate Hits Nearly 50-Year Low Despite Slowing Job Growth
October 04 2019 - 6:00AM
RTTF2
A closely watched report released by the Labor Department on
Friday showed U.S. employment increased by less than expected in
the month of September, although the report also showed the
unemployment rate unexpectedly dropped to a nearly 50-year low.
The report said non-farm payroll employment rose by 136,000 jobs
in September compared to economist estimates for an increase of
about 145,000 jobs.
The Labor Department said employment in healthcare and
professional and business services continued to trend up, while the
manufacturing sector lost 2,000 jobs amid the strike at General
Motors (GM).
Meanwhile, the increases in employment in July and August were
upwardly revised to 166,000 jobs and 168,000 jobs, respectively,
reflecting the addition of 45,000 more jobs than previously
reported.
The average monthly job growth has still slowed from 223,000
jobs per month in 2018 to 161,000 jobs per month so far in
2019.
The Labor Department also said the unemployment rate fell to 3.5
percent in September from 3.7 percent in August. Economists had
expected to unemployment rate to remain unchanged.
With the unexpected decrease, the unemployment rate dropped to
its lowest level since hitting a matching rate in December of
1969.
The unexpected drop in the unemployment rate came as a
391,000-person jump in the household survey measure of employment
more than offset an 117,000-person increase in the size of the
labor force.
Even with the unemployment rate hitting a nearly 50-year low,
the report said average hourly employee earnings edged down by a
penny to $28.09 in September after rising by 11 cents in
August.
Compared to the same month a year ago, average hourly earnings
were up by 2.9 percent in September, reflecting a notable slowdown
from the 3.2 percent increase in August.
Citing headwinds from weaker global growth, trade uncertainty
and the strong U.S. dollar, ING Chief International Economist James
Knightley expects job growth to average closer to 120,000 for the
rest of the year.
"This suggests pay growth is unlikely to accelerate markedly
from here and with inflation picking up, the real wage growth story
may not be as positive for spending power," Knightley said.
He added, "All in all, it looks as though the Fed will need to
step in with more policy easing to support the economy."
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