Unemployment Rate Falls to Record Low, But Is Real Income Growing?

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The unemployment rate in the United States fell to 3.7 per cent in September, the lowest since December 1969, when hundreds of thousands of working-age Americans were serving in Vietnam, according to a new report by the Labour Department.

There were fewer jobs, however, added to the US economy in September than analysts expected. department figures showed about 134,000 new jobs for September - well below the 185,000 anticipated by experts. September's storm and catastrophic flooding in the Carolinas likely preventing some businesses from bringing new workers on, and some people from getting to their first day on the job.

A separate measure, average hourly earnings for production and non-supervisory workers, increased 2.7% from a year earlier, after a 2.9% gain.

However, the number of jobs added was only 134,000, down from 270,000 in August. Analysts noted that this is the lowest unemployment rate since 1969. Retail payrolls dropped by 20,000 jobs in September.

The low number of new jobs last month was also partially offset by upward revisions to July and August job gains, which reflect an additional 87,000 jobs.

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This is only the tenth month since 1970 that the unemployment rate has been recorded below four per cent, with five of these months occurring in 2018, it said.

Consumers, business executives and most economists remain optimistic.

Financial markets were down sharply in afternoon trading, with the Dow Jones average falling 202 points in afternoon trading.

Many major employers announced pay increases in recent months, but those have yet to significantly move the needle nationally on average hourly earnings, which haven't topped 3 percent growth yet in this expansion.

The September jobs report was either noteworthy or disappointing, depending on how you look at it.

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

Wage growth remains sufficient to keep inflation around the Fed's 2% target.

Despite newly-imposed tariffs on steel and aluminum, manufacturing added another 18,000 jobs.

Andrew Chamberlain, chief economist of the employee review site Glassdoor, says the salaries people have been reporting through their platform show stronger growth than official measures indicate. Many forecasters predict it will decline even more in the months to come. Health care and transportation and warehousing have also continued their strong gains, adding 26,000 and 24,000 jobs respectively in September.

By almost any measure, today's labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. In fact, the Fed's latest survey of national business conditions reflected concerns about labour shortages that are extending into non-skilled occupations as much as about tariffs.

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Despite the Trump administration's protectionist trade policy, the trade deficit continues to deteriorate. And Americans with only a high school diploma recorded their best unemployment rate since 2001. Job growth has repeatedly defied economists' predictions of a slowdown.

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