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Unemployment rate falls to 3.7 percent, lowest mark since 1969

08 October 2018

"So that will continue to fuel this economy", Mohammad Vedadi, a financial adviser at Signature Wealth Management, commented on the jobs numbers on Friday.

The Labor Department said Hurricane Florence may have impacted jobs results, with leisure and hospitality employment down slightly after trending upwards over the last several months.

"I view this as the strongest labor market in a generation", said Andrew Chamberlain, chief economist at the career site Glassdoor.

A separate measure of unemployment that includes discouraged workers and those holding jobs part-time for economic reasons - sometimes called the "real unemployment rate" - edged higher to 7.5 percent. With unemployment so low, companies are facing intense pressure to raise pay to land workers. Pointing to the economy's health, the Federal Reserve last week raised the short-term interest rate it controls and predicted that it would continue to tighten credit into 2020 to manage growth and inflation.

Hurricane Florence struck North and SC in the middle of September and closed thousands of businesses. Workers are counted as employed as long as they show up for part of their pay period. The average workweek was unchanged at 34.5 hours.

Meanwhile, the labor force participation rate held steady at 62.7 percent, while the number of unemployed people fell by 270,000 to six million, with the largest drop among adult women.

USA financial markets were little moved by the report.

Economists also noted that the initial September payrolls growth estimate tended to be revised higher. The dollar was trading lower against a basket of currencies while US Treasury yields were higher. The unemployment rate is forecast falling one-tenth of a percentage point to 3.8 percent, an 18-year low first hit in May.

S&P Global economist Satyam Panday noted that the three-month average for job gains was 190,000, slightly below the rate of 201,000 over the past year.

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Average hourly earnings rose in line with forecasts, by 0.3% month-on-month and 2.8% year-on-year. At its current pace, year-over-year wage growth is on track to cross three percent by the end of 2018.

Powell said more wage growth is "quite welcome" and the Fed isn't anxious yet about higher pay causing inflation.

This week, Amazon announced that it will raise the minimum wage for all USA workers to $15 per hour, starting in November.

Consumers, business executives and most economists remain optimistic. "The standard measures just don't reflect those increases well, if at all".

Retail payrolls dropped by 20,000 jobs last month, the figure also revealed.

Today's jobs figures show that United States manufacturing payrolls increased by 18,000 in September.

Details across industries showed construction payrolls rose by 23 000 and manufacturing added 18 000 jobs. In fact, the Fed's latest survey of national business conditions reflected concerns about labour shortages that are extending into non-skilled occupations as much as about tariffs.

The trilateral trade agreement between the US, Canada and Mexico was salvaged in an 11th-hour deal on Sunday. Orders increased 8.6 percent on a year-on-year basis in August.

The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of US$38.6 billion.

Unemployment rate falls to 3.7 percent, lowest mark since 1969