Unemployment Hits a 50-Year Low, Job Growth Slows

By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC

The U.S. job growth rate for September hit a slump, while the unemployment rate hit a successful low.

September’s job creation slowed and fell to its lowest level in a year according to Labor Department figures released last week. Non-farm payrolls rose just 134,000 which was below estimates of 185,000.

The average hourly earnings component showed a 2.8 percent year-over-year increase, which was right in line with Wall Street’s estimates. August’s initial job count was significantly revised shooting up from 201,000 to 270,000.

Job gains for September higher in professional and business services rising by 54,000. Healthcare saw 26,000 new positions while transportation and warehousing were up 24,000. Construction also showed gains with 23,000 new jobs. On the other hand, leisure and hospitality represented the most significant declines with 17,000 jobs lost, some of which can be attributed to Hurricane Florence.

“The labor market is in great shape heading into the end of 2018,” said Gus Faucher, chief economist at PNC. “Job growth was a bit softer in September, but some of that was from Hurricane Florence, and it should bounce back through the rest of 2018 and into 2019.”

While the job creation rate slowed, the unemployment rate dropped to a 50-year low. The unemployment rate fell two-tenths of a point to 3.7 percent, the lowest level since December 1969 and one-tenth of a percentage point below expectations.

This decline in the unemployment rate did not come from a shrinkage in labor force – in fact, the civilian labor force increased by 150,000 and the participation was unchanged at 62.7 percent.

A separate measure of unemployment looks at discouraged workers or people holding part-time jobs for economic reasons. The “real unemployment rate” as some call it, crept to 7.5 percent. Unemployment among black Americans also declined three-tenths of a point to 6 percent.

The data shows this to be a strong time for the U.S. economy which grew at an average rate of 3.2 percent in the first half of 2018 and could post an increase more than 4 percent for the third quarter.

  • 24 Oct, 2018
  • Josh Smith

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