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U.S. Added 134,000 Jobs in September; Unemployment at 3.7% With 8 Years of Job Gains, Unemployment Is Lowest Since 1969
(35 minutes later)
The Labor Department released its official hiring and unemployment figures for September on Friday, providing the latest snapshot of the American economy.The Labor Department released its official hiring and unemployment figures for September on Friday, providing the latest snapshot of the American economy.
■ 134,000 jobs were added last month. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.■ 134,000 jobs were added last month. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.
■ The unemployment rate was 3.7 percent. August’s jobless rate was 3.9 percent. ■ The unemployment rate was 3.7 percent, the lowest since 1969.
■ Average earnings rose by 8 cents an hour and are up 2.8 percent over the past year.■ Average earnings rose by 8 cents an hour and are up 2.8 percent over the past year.
September marked the 10th anniversary of the collapse of Lehman Brothers and the start of the financial crisis. It also represented a milestone in the remarkable rebound that followed: eight straight years of monthly job growth, double the previous record. ■ Hiring figures for July and August were revised up by a combined 87,000 jobs.
By nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. The unemployment rate is close to a two-decade low. Job growth has repeatedly defied economists’ predictions of a slowdown. African-Americans, Latinos and other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record. The unemployment rate fell to a nearly five-decade low in September, punctuating a remarkable rebound in ten years after the collapse of Lehman Brothers set off a global financial crisis.
Employers added 134,000 jobs in September, the slowest pace of growth in a year, and wage growth cooled slightly from August. But there is little evidence that those mildly disappointing figures mark a larger slowdown. Friday’s report marks eight straight years of monthly job growth, double the previous record.
By nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. Job growth has repeatedly defied economists’ predictions of a slowdown. African-Americans, Latinos and other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.
“I view this as the strongest labor market in a generation,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “These really are the good times.”“I view this as the strongest labor market in a generation,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “These really are the good times.”
Those good times, however, have not yet translated into robust pay gains for many workers. The slow pace of wage growth has been a persistent source of disappointment in the recovery, and economists have long looked for evidence that the tight labor market is at last forcing companies to hand out raises. The current economic expansion is already one of the longest on record, but there is no sign of it losing steam. Economic output last quarter rose at its fastest pace in four years, and this quarter looks strong as well. Yields on United States government bonds have risen sharply in recent days, an indication that investors expect faster growth, and more inflation, in coming years.
“We are seeing some acceleration in average hourly earnings, maybe not as much as we would expect given how tight labor markets are,” said Ben Herzon, an economist for Macroeconomic Advisers. For months, the one knock on the economy has been that strong hiring has not yet translated into robust pay gains for many workers. There are signs that could finally be changing, however.
The long-awaited pickup may already have begun. Amazon announced this week that it would raise wages for all its employees in the United States to at least $15 an hour. Average hourly earnings were up 2.8 percent in September from a year earlier, a slight slowdown from the 2.9 rate in August. But earnings growth has drifted upwards in recent months, and other measures show stronger growth.
But while faster wage growth would be good news for workers, it could worry policymakers at the Federal Reserve, who are watching for signs that the economy is “overheating” — that is, that the tight labor market and strong economy are sowing the seeds for faster inflation down the road. If those concerns mount, the Fed might raise interest rates more quickly than planned, which could bring the recovery to an end. Workers at the bottom of the earnings ladder are seeing particularly strong growth: Amazon announced this week that it would raise wages for all its employees in the United States to at least $15 an hour.
So far, there isn’t much evidence of that happening. The Fed raised interest rates last month as expected, but has thus far been content to move slowly. Jerome Powell, the Fed chairman, said this week that the economy was good but “not too good to be true.” Amy Glaser heard the Amazon news on television while getting ready for a meeting with a rival e-commerce firm. Ms. Glaser, a senior vice president at the staffing firm Adecco, helps companies staff up for the holiday season — a job that Amazon had just made even more difficult.
Take extra care interpreting September’s jobs figures because of Hurricane Florence, which hit the Carolinas in the middle of the month. Natural disasters can affect employment numbers in various ways: interfering with data collection, disrupting hiring and putting people temporarily out of work as businesses shutter and residents evacuate. “There was definitely a feeling of concern,” Ms. Glaser said. “It puts increased pressure on them in a market where they already knew they were going to have to make significant adjustments on wages.”
Last year, the storms that hit Florida and Texas wreaked havoc on September’s employment data. The government’s initial report showed an unexpected net loss of jobs for the month; that figure was later revised up to show a tiny gain. Roughly 1.5 million people reported being unable to work because of the weather. Higher pay alone might not be enough. The combination of the tight labor market and rapidly growing online sales has made the competition for warehouse workers particularly fierce this year. Ms. Glaser said companies are moving up their hiring timelines, easing job requirements and giving workers more control over their schedules — a big shift in an industry that has traditionally expected workers to show up when and where they are needed.
This year, the impact was probably more modest. Florence affected a smaller part of the country than last year’s storms, and hit at a time in the month when it is less likely to disrupt data collection or measurement. Still, the storm may have muddied measures of earnings and working hours. “The demand for workers is higher than ever and the supply just isn’t out there right now,” Ms. Glaser said.
Some economists had warned that September’s numbers could be skewed by the effects of Hurricane Florence, which hit the Carolinas in the middle of the month. But there was little sign of the storm in Friday’s report.
The Bureau of Labor Statistics said survey response rates were “within normal ranges.” About 300,000 people reported being not at work due to bad weather — more than in a typical month, but far below the 1.5 million who were kept out of work a year ago, when hurricanes hit Florida and Texas.
Compared to those storms, Florence affected a smaller part of the country than last year’s storms, and hit at a time in the month when it is less likely to disrupt data collection or measurement. Still, economists cautioned that the storm may have muddied measures of earnings and working hours, at least in some industries.
Friday’s report is one of the last major economic releases before November’s midterm elections. The next round of jobs data will come four days before Election Day, by which point most voters’ minds may be made up.Friday’s report is one of the last major economic releases before November’s midterm elections. The next round of jobs data will come four days before Election Day, by which point most voters’ minds may be made up.
Republicans are counting on the strong economy to help hold off a potential “blue wave” of Democratic victories in the House and Senate. President Trump has repeatedly played up the low unemployment rate as evidence that his policies are working. It isn’t clear, however, that economic data will have much effect at the polls. Surveys show that views of the economy are split along partisan lines, with Democrats and even many independents expressing less optimism than Republicans.Republicans are counting on the strong economy to help hold off a potential “blue wave” of Democratic victories in the House and Senate. President Trump has repeatedly played up the low unemployment rate as evidence that his policies are working. It isn’t clear, however, that economic data will have much effect at the polls. Surveys show that views of the economy are split along partisan lines, with Democrats and even many independents expressing less optimism than Republicans.
Policymakers are also paying close attention. Officials at the Federal Reserve are watching for signs that the economy is “overheating” — that is, that the tight labor market and strong economy are sowing the seeds for faster inflation down the road. If those concerns mount, the Fed might raise interest rates more quickly than planned, which could bring the recovery to an end.
So far, there isn’t much evidence of that happening. The Fed raised interest rates last month as expected, but has thus far been content to move slowly. Jerome Powell, the Fed chairman, said this week that the economy was good but “not too good to be true.”