Labor Dept.: Unemployment, job growth down in September

Devin Lawrence
October 7, 2018

U.S. non-farm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. July's numbers were revised up to 165,000 jobs from the previous estimate of 147,000; at the same time August's job number was revised up to 270,000 from the initial estimate of 201,000.

The economy has now added jobs for almost eight straight years. But Morgan Stanley said the storm likely affected too limited of an area and struck too late during the week of Labor's survey to have a meaningful impact.

United States financial markets were little moved by the report.

The unemployment rate is now at 3.7 percent, the lowest rate since December 1969, when the jobless rate was 3.5 percent.

The U.S. unemployment rate is at a historic low. It said it was impossible to quantify the net effect on employment. With unemployment so low, companies are facing intense pressure to raise pay to land workers.

The average workweek was unchanged at 34.5 hours, today's figures show.

Andrew Grantham, senior economist at CIBC described September's employment report as "solid", despite the weaker than expected headline number.

The unemployment rate for Hispanics fell to 4.5 per cent and for women, it fell to 3.6 per cent.

USA stock index futures briefly turned positive after the data before reversing course. The dollar .DXY was little changed against a basket of currencies, while stocks on Wall Street were trading lower. Analysts noted that this is the lowest unemployment rate since 1969.

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Average hourly earnings are forecast to have increased 0.3 percent in September after leaping 0.4 percent in the prior month.

Average hourly earnings rose 8 cents to $27.24, lowering the annual gain to 2.8 percent from a nine-year high of 2.9 percent in August.

Manufacturing payrolls likely rebounded in September after declining in August for the first time in 13 months amid a drop in employment at motor vehicle assembly plants.

That run has added almost 20 million people to the nation's payrolls since the Great Recession, which cost almost 9 million their jobs. Manufacturers expanded their payrolls by 18,000. Health care and transportation and warehousing have also continued their strong gains, adding 26,000 and 24,000 jobs respectively in September.

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

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60bn worth of United States products. The Trump administration tariff on $200 billion in Chinese imports - along with China's retaliation against USA imports - took effect last month and has hit many consumer goods.

Despite the Trump administration's protectionist trade policy, the trade deficit continues to deteriorate.

The Commerce Department said on Friday the trade gap increased 6.4 percent to US$53.2 billion, widening for a third straight month.

Imports of goods and services increased 0.6 percent to a record US$262.7 billion in August.

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