Unemployment rate drops to 3.7 percent - lowest since 1969

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Modal Trigger AP

The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Bureau of Labor Statistics reported today.

Newly released data by the Labor Department shows that United States employers added 134,000 jobs last month with hiring increases within construction, manufacturing and health care sectors. However, the so-called real unemployment rate, which factors in discouraged workers who take part-time jobs for economic reasons, climbed to 7.5 percent. It also represented a milestone in the remarkable rebound that followed: eight straight years of monthly job growth, double the previous record.

Applications fell to 202,000 during the week ended 15 September, which was the lowest level since November 1969.

In addition, the GDP grew an estimated 4.2 percent in the second quarter, claims of unemployment insurance are the lowest since the 1960s, middle-class income is highest on record (adjusted for inflation), and small business optimism has hit one record after another since Trump's election.

What's more, the government on Friday revised sharply up its estimate of hiring for July and August by 87,000 jobs. This not only deflated the monthly payroll change, it also showed up in outsized wage pressures for the construction and utility sectors.

The labour market, which is viewed as being near or at full employment, is steadily boosting wage growth, which could help to support consumer spending as the stimulus from the Trump administration's $1.5 trillion tax-cut package fades. Before the official jobs report came out, economists had estimated that the number of jobs added for September would reach 185,000.

Will an economy at a 3.7 unemployment rate be able to add that many jobs in the next 12 months? "We'll see in earnings season how much of an impact it will have on profit markets as labor is a business's biggest cost".

Those good times, however, have not yet translated into robust pay gains for many workers. September's storm and catastrophic flooding in the Carolinas likely preventing some businesses from bringing new workers on, and some people from getting to their first day on the job. Pointing to the economy's health, the Fed last week raised its benchmark short-term rate and predicted that it would continue to tighten credit into 2020 to manage growth and inflation.

Earlier this week, Amazon announced that it was raising its minimum wage to $US15 an hour, more than twice the federal mandate of $US7.25. That compares with 23 000 in August, though the September 2017 count of 1.47 million - following hurricanes Harvey and Irma - was the highest since 1996. And if more people are working, they're continuing to spend their money.

USA construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Economists have said any weather-related volatility in the data may be short-lived, similar to the pattern around past storms.

From the low point in the aftermath of the financial crisis, the number with jobs has increased by nearly 20 million.

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