Unemployment is at its lowest level in nearly 50 years, new jobs report shows

The monthly jobs report showed little impact from Hurricane Florence, despite billions of dollars in damage.
by Lucy Bayly /  / Updated 
Image: An employee moves a flywheel assembly at the Harley-Davidson Inc. facility
An employee moves a flywheel assembly at the Harley-Davidson Inc. facility in Menomonee Falls, Wisconsin.Bloomberg / Getty Images file

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The economy continues its nine-year expansion, with an unemployment rate now at 3.7 percent, the lowest since 1969, according to data released Friday by the Department of Labor.

However, the average monthly jobs total disappointed, with a gain of just 134,000 for September — the lowest monthly total so far in 2018, according to the employment report from the Bureau of Labor Statistics.

Wage growth, which has for months been a sluggish outlier among otherwise robust economic metrics, increased slightly to 2.8 percent year on year — indicating that employers now have to offer more competitive remuneration in order to retain and attract workers from a tightening labor pool.

"The positive wages trend for workers should continue and even accelerate as long as the overall patterns of growth and hiring remain intact," said Mark Hamrick, senior economic analyst at Bankrate.

Although major storms such as Hurricane Harvey have negatively affected the Labor Department’s figures in the past, Hurricane Florence barely left any imprint on September's data, since the storm did not disable any major cities or economies to the same extent as Harvey did in the Houston area last year.

“The high levels of employment have been feeding wage increases and fueling higher consumer spending, in turn leading to rising inflation," said Fiona Cincotta, senior market analyst at City Index. "Now the speculation will start if the Federal Reserve will speed up its planned rate hikes this year and next.”

The Fed approved its third rate increase of 2018 last month, an indication that it may soon be able to take a back seat for the first time since the 2008 financial crisis and allow the economy to steer itself.

Markets reacted positively to Friday's report, having suffered one of their worst days in months on Thursday as the Dow Jones had its largest one-day percentage drop since August, with the S&P and Nasdaq also seeing their biggest daily drop in more than three months.

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