The exceptionally healthy labor market has been a major contributor to the booming American economy and for that reason, every bit of employment-related information is closely scrutinized. The reports of last month’s slowdown in job growth are being received with a bit of skepticism, though every other aspect of the sector remains upbeat.
While economists blame multiple factors, including the impact of the recent hurricane, for the slowdown, a closer look at the numbers shows the overall employment scene remains strong. The reality is that the marked improvement in the unemployment rate in recent months and the pickup in wage growth can eclipse the deceleration in job growth.
The improvement in the jobless rate in recent months and the pickup in wage growth can eclipse the deceleration in job growth
Data published by the Labor Department Friday showed the unemployment rate dropped to 3.7% in September from 3.9% in August, hitting the lowest level in nearly 50 years. The jobless rate remained below the 4%-mark for the fifth consecutive month, and the number of unemployed Americans dropped below six million for the first time in eighteen years. Economists were looking for an unemployment rate of 3.8%.
Around 134,000 persons joined the labor force last month, which was the smallest number in about a year and below expectations. Once the revisions to the preceding two months are included, the employment number would be 221,000. After registering muted growth in the early months of the year, the average hourly wages of private sector employees rose sequentially to $27.24 last month, reflecting a 2.8% year-over-year increase.
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The department in a statement said it is making efforts, jointly with the state authorities, to assist people in finding new jobs and returning to work, in the wake of hurricane Florence. “The American economy continues to fire on all cylinders. During the past few months, we have seen GDP growth exceed 4%, consumer confidence rise to an 18-year high, and the stock market set new records,” said Secretary of Labor Alexander Acosta.
The bigger picture being encouraging, a negative reaction from Wall Street investors is unlikely. So far, the stock markets and the dollar are pretty stable.
Job growth slows in July; Unemployment rate near historic low