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- The US unemployment rate in September fell to 3.7%, its lowest level since December 1969.
- Employers added fewer nonfarm positions than expected as Hurricane Florence caused job losses in restaurants and bars.
- Wages increased in line with forecasts.
The US unemployment rate fell to a 48-year low in September even after Hurricane Florence kept many Americans away from work.
According to the monthly jobs report from the Bureau of Labor Statistics released Friday, the unemployment rate in September fell to 3.7%, its lowest level since December 1969, when Richard Nixon was president.
Nonfarm payrolls increased by 134,000, fewer than expected and slowed in part by job losses attributed to Hurricane Florence. Nearly 300,000 workers told the BLS that bad weather kept them away from their jobs, most likely in industries like hospitality in which they’re paid only if they show up.
BLS revisions added 87,000 more jobs for July and August.
The low unemployment rate provided more evidence of a booming economy, which is now in a record eight-year streak of job gains. It also showed the labor market continuing to tighten, perhaps eventually pressuring companies to pay workers more.
“Given the fact that the job market has been so strong for so long, there is an expectation that labor will begin to take more of the capital from corporate profits going forward,” said Michael Arone, the chief investment strategist for the US SPDR business at State Street Global Advisors.
“We haven’t necessarily seen that translate through as aggressively as in past economic expansions.”
Average hourly earnings rose in line with forecasts, by 0.3% month-on-month and 2.8% year-on-year.
Earlier this week, Amazon announced that it was raising its minimum wage to $15 an hour, more than twice the federal mandate of $7.25. That was not expected to move the needle on last month’s wage number but served as a key anecdote on the pressure companies were under – politically and from a tight labor market – to raise wages.
Investors were also watching wage growth closely amid a sell-off in the bond market. Bond yields rise when prices fall, and they spiked Wednesday to their highest level in over seven years after a strong private-payroll report from ADP and bullish comments from the Federal Reserve’s chairman, Jerome Powell.
“The US economy is on fire right now and the bond market has been underestimating just how hot the economy is,” said Lawler Jasper, the head of research at London Capital Group. “What we are seeing here is that complacency start to fade.”
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