The Lowest Employment Rate in 40 Years
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October 8, 2018
The unemployment rate fell to 3.7 percent, the lowest since 1969, says the Labor Department. Only 134,000 jobs were added, and the Carolinas have had to reduce employment by 33,000 jobs; however, the unemployment rate continues to drop. According to a survey last month, it was estimated that 185,000 new jobs were created, and Goldman Sachs predicted a dip in employment due to Hurricane Florence.
However, Morgan Stanley believes the storm effected too small of an area and happened too late during the survey to have a large effect on employment numbers. This is because an employee is considered employed if they show up for any portion of their pay period.
The largest drop in jobs were in the leisure and travel sector, which was reduced by 17,000 jobs. It was attributed to impacts from the hurricane.
The labor market is dealing with other problems besides that of weather. Many employers are finding it difficult to find qualified candidates. Employment analysts are expecting this problem to slow hiring in upcoming months.
Trump’s new tariff on Chinese goods may slow hiring as well.
Wages Grow Slowly
The average hourly wage rose by 8 cents, making it $27.24. Goldman Sachs estimates that Florence may have artificially inflated hourly wages by cutting hours without reducing pay.
Professional and business services added 54,000 jobs; the health care sector added 30,000; construction added 23,000; and manufacturing added 18,000.
Retailers, who are struggling against the increase of online shopping, lost 20,000 jobs.
What It Means
While the report was disappointing with a low amount of jobs added, there were many factors that affected the survey. Hurricane Florence had a negative impact in the Carolinas, and the Labor Department routinely must revise their payroll gains.
Jobs for July and August increased by 87,000, offsetting the disappointing September outlook.