Unemployment drops to 3.7 percent; 134,000 jobs added in September

Unemployment drops to 3.7 percent; 134,000 jobs added in September

Unemployment drops to 3.7 percent; 134,000 jobs added in September

The U.S. central bank raised interest rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining "accommodative". Another healthy picture of hiring is expected when the US government issues its September jobs report Friday, Oct. 5. Average hourly earnings climbed 2.8% from a year earlier, matching projections, while the jobless rate fell more than projected to 3.7%, the lowest since 1969. September's anticipated job gains would match the monthly average for the past three months.

The US and China had already imposed tariffs on $50 billion worth of each other's goods.

Even so, some experts say investors shouldn't be concerned about rising wages and inflation forcing the Federal Reserve to tighten more aggressively.

Still, should the tariffs remain fully in effect a year from now, roughly 300,000 jobs could be lost by then, according to estimates by Mark Zandi, chief economist at Moody's Analytics.

Will an economy at a 3.7 unemployment rate be able to add that many jobs in the next 12 months?

In addition, the GDP grew an estimated 4.2 percent in the second quarter, claims of unemployment insurance are the lowest since the 1960s, middle-class income is highest on record (adjusted for inflation), and small business optimism has hit one record after another since Trump's election.

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.

If the rate keeps dropping, it will heighten two concerns: Has the economy soaked up almost all the people who want or are able to work?

Economists will also be eyeing the all-important wage figures, as a tightening US labor market has pushed pay higher. And women were much less likely to work.

The number of unemployed people who have given up looking for jobs because they believe that none are available was the same as it was in September 2017. Over the course of this year, recruiters have been more open to job candidates they may before have overlooked, such as those with criminal histories. At the same time, other demographic factors also lower the wage total, as higher-paid older workers retire.

Nonfarm payrolls likely increased by 185,000 jobs last month after surging 201,000 in August, according to a Reuters survey of economists. However, there was an increase in the number of people working part-time who want full-time work.

With September's increase below the 0.5 percent gain notched during the same period last year, that would lower the annual increase in wages to 2.8 percent from 2.9 percent in August, which was the biggest rise in more than nine years. The strength of that gain, if it can be sustained, would suggest that the low unemployment rate is pressuring more companies to raise pay in order to attract and keep workers. Amazon responded on Tuesday by raising its minimum wage to $15 an hour. Retailers have begun scrambling to hire enough workers for what's expected to be a robust holiday shopping season.

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