Saturday, 20 October, 2018

BACK TO WORK: Unemployment Drops to 3.7%, Lowest Since DECEMBER 1969

The American Economy Added Just 134,000 Jobs in September Unemployment Drops to Lowest Level Since 1969		AFP5 Oct 2018 The American Economy Added Just 134,000 Jobs in September Unemployment Drops to Lowest Level Since 1969 AFP5 Oct 2018
Nellie Chapman | 06 October, 2018, 04:40

Compared with a year ago, average hourly earnings were up 2.8%, slightly less than the 2.9% in August, owing to a tougher comparison. The storm struck North and SC in the middle of September and closed thousands of businesses.

The Fed raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining "accommodative".

Still, if the prime-age workers increasingly enter the job market, their numbers could expand the workforce a bit and help accelerate economic growth. It further states that such people are "less likely to have formal work arrangements, and are therefore more likely to lack decent working conditions, adequate social security and "voice" through effective representation by trade unions and similar organizations". Smoothing out the revisions and monthly perturbations, the three-month average payroll gain is a sturdy 190,000, while the 12-month average increase is 211,000.

The historically low unemployment rate and relatively weak job growth number might indicate that employers are having an increasingly hard time adding positions because of the availability of workers. Job gains in July and August were revised up a combined 87,000 from the original reports.

Economists will also be eyeing the all-important wage figures, as a tightening US labor market has pushed pay higher. The average workweek was unchanged at 34.5 hours. "While that annual rate is a tick lower than the prior month, there is a soft monthly print falling out of the calculation next month and as such wage growth could soon break above 3% for the first time".

The household survey showed 299,000 people reported staying at home in September because of the weather, while 1.489 million employees worked part-time because of the weather. Americans are confident about the economic outlook, buoyed by the job gains and signs of higher pay.

"I'd expect a solid rebound in the next month", as other data indicate "it's a very strong labor market". Amazon responded on Tuesday by raising its minimum wage to $15 an hour. The dollar.DXY was little changed against a basket of currencies, while stocks on Wall Street were trading lower.

Average hourly earnings rose by 0.3% in September, as expected, and the same as the preceding month. Overall government payrolls increased by 13,000.

Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August. In fact, the Fed's latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of USA products. Both drops could have been affected by the hurricane, which likely disrupted hiring in these high turnover sectors. The United States and China had already imposed tariffs on $50 billion worth of each other's goods.

The Trump administration says eliminating the trade deficit will put the economy on a sustainable path of faster growth, an argument that has been dismissed by many economists as flawed given constraints such as low productivity and slow population growth.