USA unemployment drops to the lowest level since 1969

The September Employment Report was solid despite slower than expected job growth.
												
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The September Employment Report was solid despite slower than expected job growth. Share on Facebook Share on Twitter

A gauge of both unemployment and underemployment rose 0.1 point to 7.5 percent. This suggests that the tax cuts that took effect this year are boosting job opportunities.

"The unemployment rate fell two-tenths of a percentage point to 3.7 percent, the lowest level since December 1969 and one-tenth of a percentage point below expectations", writes CNBC. Hurricane Florence probably dented hiring in some sectors as well, which should reverse in the coming months. Average hourly earnings rose from $27.06 to $27.16 - an annual rate increase of 4.5 percent and bringing year-over-year increases to 2.9 percent. Gains or losses are calculated via the Current Employment Survey of 147,000 business establishments, while the unemployment rate is based on the Current Population Survey of 60,000 households. Then, thanks to an Obama-initiated economic stimulus that some Democrats labeled necessary but inadequate, and 90 percent of Republicans flat-out opposed, the number of available jobs grew steadily, albeit with excruciating slowness over the next six years. But despite the lower jobless rate, non-farm employers added just 134,000 net new positions, far weaker than analysts expected.

The unemployment rates for adult women (3.3 percent) and Whites (3.3 percent) declined in September.

Canada as a whole added 229,100 jobs in September of 2017 compared to September 2018. Job gains in July and August were revised up a combined 87,000 from the original reports.

Mickey Levy is the chief economist for the United States, the Americas, and Asia at Berenberg Capital Markets, LLC and a member of E21's Shadow Open Market Committee (SOMC).

Employees temporarily left unable to work during natural disasters can be left off the government's monthly jobs survey, especially part time workers who receive no pay during the week of the survey, meaning figures can rebound in the month after a storm.

The tightening of the labor market is leading to an increase in wages.

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