- US Job Market Cools in September, Unemployment Improves to 3.7%
The U.S. job market cooled in September following Hurricane Florence disturbance, but unemployment rate improved to near 49 year low of 3.7 percent.
The non-farm payrolls surged by 134,000 jobs last month, according to the Labor Department. The number was the lowest in a year and below economists projection of 185,000 for September.
The drop has been attributed to the drop in jobs created by the retail and leisure and hospitality sectors in affected areas.
Data for July and August were revised up to show 87,000 more jobs than previously reported.
The closely watched monthly job report showed wages are rising steadily and suggested moderate inflationary pressures that could ease concerns over the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.
The world’s largest economy needs to create about 120,000 jobs every month to keep up with growth in the working-age population.
“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”
On Tuesday, Fed Chairman Jerome Powell said economic outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.
The Fed raised interest rates for the third time this year and removed monetary policy remaining “accommodative” word.
While the Labor Department said it was possible that Hurricane Florence, which hits South and North Carolina in mid-September, could have affected jobs in some industries. The agency said it was impossible to quantify the impact on job creation.
Wage growth dropped from 2.9 percent in August to 2.8 percent year on year in September. Still, experts believe it is sufficient to keep inflation around the Fed’s 2 percent target.
The US dollar fell against the Euro to trade at 1.1513.