US weekly jobless claims near 49-year low; factory orders surge

US weekly jobless claims near 49-year low; factory orders surge

US weekly jobless claims near 49-year low; factory orders surge

The unemployment rate in the U.S. fell to 3.7 per cent in September, the lowest since December 1969, when hundreds of thousands of working-age Americans were serving in Vietnam, according to a new report by the Labour Department.

The total number of monthly jobs was a disappointment with only 134,000 jobs added in September 2018. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.

At the same time the unemployment rate came in at 3.7%, down significantly from August.

- Average earnings rose by 8 cents an hour and are up 2.8 percent over the past year.

By almost any measure, today's labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. The September gain extended an 8½-year streak of monthly job growth.

By almost any measure, today's labor market is the strongest since the dot-com boom of the late 1990s and early 2000s.

The last time the general unemployment rate was this low, millions of men had been drafted for the Vietnam War, and, therefore, taken out of the labor force. Job growth has repeatedly defied economists' predictions of a slowdown.

Unemployment among African Americans declined three-tenths of a percent to 6 percent, close to the record low of 5.9 percent set in May.

A recent report from the Organisation for Economic Cooperation and Development said that compared to other countries "a large share of the population remains at the fringes of the labour market". "While that annual rate is a tick lower than the prior month, there is a soft monthly print falling out of the calculation next month and as such wage growth could soon break above 3% for the first time".

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The fallout from Florence was apparent in employment at restaurants and bars, an industry where most workers only get paid if they show up to work.

The tightening of the labor market is leading to a more visible acceleration in wages.

"We haven't necessarily seen that translate through as aggressively as in past economic expansions".

The long-awaited pickup may already have begun. Online retail giant Amazon.com Inc (AMZN.O) announced this week that it would raise its minimum wage to $15 per hour for USA employees starting in November.

The report reinforced the view of Federal Reserve policymakers, who cited a strong job market when they announced they were increasing a benchmark interest rate - the third hike in a year. If those concerns mount, the Fed might raise interest rates more quickly than planned, which could bring the recovery to an end.

The last time the U.S. jobless rate was so low preceded more than a decade of economic pain tied to rising price pressures and efforts to rein them in.

Why? The short answer: The economy is good.

Hurricane Florence, the storm that made landfall along the mid-Atlantic US coast on September 14, caused widespread disruption for homes and employers but it was not possible to determine the extent to which this might have depressed the September jobs numbers, officials said.

Numerous dislocated people will probably return to work. Bond yields spiked following the jobs report, with the benchmark 10-Year Treasury hitting 3.24 percent - its highest level in more than seven years.

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