USA weekly jobless claims drop to near 49-year low

Share

Unemployment rates for African-Americans fell slightly from 6.3 percent to 6 percent. Many Americans will be looking at the employment rate, especially with the midterm elections coming in November.

US Federal Reserve Chairman Jerome Powell said earlier this week that the economy's outlook was "remarkably positive" and he believed it was on the cusp of a "historically rare" era of ultra-low unemployment and tame inflation. The central bank raised rates last week for the third time this year. The unemployment rate hit 3.5 percent in December 1969, after a streak of brisk economic growth had kept joblessness at or below 4 percent for four years.

The US economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

United States 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.

Exports of goods and services fell 0.8 percent to US$209.4 billion in August.

Economists expected only a marginal impact on payrolls from Hurricane Florence, which lashed South and North Carolina in mid-September.

President Donald Trump's trade fights could also weigh on the economy, though the effect on hiring won't likely be felt until next year, economists say.

Teenagers, less-educated workers and disabled Americans have also made progress in recent months and anecdotal reports suggest that companies were becoming more willing to hire people with criminal records or to waive drug-testing requirements.

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 a year ago. An Institute for Supply Management survey published this week showed robust employment gains in the services sector in September. But the two previous months' payrolls were revised up by a total of 87,000.

Wage growth remains sufficient to keep inflation around the Fed's 2% target. "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". Amazon responded this week by raising its minimum wage to $15 an hour.

"Employers are finding it harder to recruit and having to pay more when they do", Mr Robbins said. The most direct evidence of the hurricane's impact showed up in the elevated number of workers who reported reduced hours due to bad weather - this metric was over six times larger than what is normal for September.

The increase of part-time rather than full-time workers could be keeping the wages down.

The US economy continued to smash expectations and break records in September, with recently released data showing the unemployment rate dropping to just 3.7%; the lowest level since December 1969.

Nonfarm payrolls likely increased by 185,000 jobs last month after surging 201,000 in August, according to a Reuters survey of economists. "There are plenty of new, high paying jobs available in our great and very vibrant economy", Trump said in a September 20 tweet.

Share