Unemployment hits 49-year low, economy adds 134K jobs in September

The U.S. economy added 134,000 jobs in September, well below expectations, as the labor market still shows strength heading into the fall.  

The unemployment rate fell to 3.7 percent for the lowest level since December 1969, the Labor Department reported on Friday.

{mosads}Mark Zandi, chief economist of Moody’s Analytics, said after a private survey found that businesses added 230,000 jobs last month, that at the current pace of job creation, unemployment will fall into the low 3 percent’s by this time next year.

Estimates had been for about 184,000 jobs in September.

There were 87,000 more jobs in July and August than initially reported.

Jason Furman, the former head of the Council of Economic Advisers in the Obama administration, said the drop in unemployment along with upward revisions in jobs growth in July and August is “enough to make you ignore the 134K headline jobs number” and “you would be mostly right in doing that,” he wrote on Twitter. 

After revisions, job gains have averaged 190,000 a month over the past three months, a sign of continued strength in the labor market.

President Trump took to Twitter quickly to tout the numbers.

“Just out: 3.7% Unemployment is the lowest number since 1969!” the president tweeted. 

Just out: 3.7% Unemployment is the lowest number since 1969!

— Donald J. Trump (@realDonaldTrump) October 5, 2018

With the tweet, Trump again violated a federal rule that says federal workers should not comment on the jobs report until an hour after it has been released. Previous White House’s have typically followed the rule but none used Twitter like Trump.

The economy has added jobs for 96 straight months, beginning in October 2010 under President Obama. It is the longest streak of monthly jobs growth on record.

“The labor market is in excellent shape heading into the end of 2018, perhaps the best it has been in 50 years,” said Gus Faucher, chief economist for PNC.

“Job growth was a bit softer in September, but some of that was from Hurricane Florence, and it should bounce back through the rest of 2018 and into 2019,” Faucher said.

“Job growth is set to slow next year as an inability to find workers weighs on hiring,” he said.

Wage growth ticked up with average hourly earnings up 2.8 percent for the year, slightly slower than the 2.9 percent posted in August. 

Hurricane Florence, which hammered North and South Carolina, may have skewed the data although the Labor Department said they received a normal number of responses for their surveys.

Diane Swonk, chief economist at Grant Thornton, said that the September number will probably be revised over the next couple of months from any fallout of the storm.  

Construction employment increased by 23,000, the same amount as August, adding a total of 315,000 jobs over the past year.

The manufacturing sector bounced back with an 18,000 job gain in September, after shedding 3,000 jobs in August.  

The economy grew at a 4.2 percent pace in the April-July quarter, the fastest pace in four years, but experts warn that trade could eventually cut into some of those gains. 

Growth is expected to be slower in the third quarter to around 3.5 percent. 

Sen. John Thune (R-S.D.), chairman of the Senate Republican Conference, touted the falling unemployment rate and that his party’s actions are improving Americans’ lives through economic growth.

“Our economy keeps getting better,” Thune said.

“As a result of the positive reforms the Republican-led Congress implemented to grow our economy, more Americans are getting back to work,” he said.

Consumer and business confidence are strong even despite concerns about trade with plenty of jobs available for those who want to change positions or jump back into the labor market. 

Consumer confidence is near its highest level in 18 years.  

But House Minority Leader Nancy Pelosi (D-Calif.) said that “beneath the September jobs numbers, middle-class families across America are struggling to keep their heads above the rising costs of health care, prescription drugs and everyday living expenses.”

“The American people deserve better than a Republican Congress and administration that steals from their futures again and again, just to enrich the GOP’s special interest friends,” Pelosi said.

The United States, Canada and Mexico this week completed an updated North American trade agreement that the Trump administration says will help build on economic gains. 

But Trump’s hefty tariffs on steel and aluminum and his brewing trade war with China could eventually hit consumers with higher prices and the economy with slower growth. 

Trump has focused on lowering trade deficits but a new report on Friday showed that the gap increased to $53.2 billion in August from $50 billion in July, the Commerce Department reported on Friday. 

The August deficit with China — $38.6 billion — was the highest on record.

Updated at 12:50 p.m.