Unemployment Rate Near 50-Year Low in September Jobs Report

Oct 09, 2018
| Michael Altiero
September Jobs Report

It’s that time again when the Bureau of Labor Statistics releases their latest Jobs Report.

The August results were positive all-around even though the unemployment rate remained stagnant at 3.9%. The labor market exceeded expectations and, most importantly, wage growth finally increased year-over-year to 2.9%.

Given the impressive results, many were eagerly anticipating the next report. On October 5th, the Bureau of Labor Statistics released the results of the September Jobs Report. Let’s take a look at the data!

Unemployment Rate Impresses

One of the bigger disappointments in last month’s report was that the unemployment rate remained the same as July (3.9%), and even that was seen as a good result. But the latest data is extremely encouraging.

The unemployment rate in September fell to 3.7%, the lowest it has been since December 1969 and beating expectations by one-tenth of a percentage point.

This number continues to show the strength of the labor market, which experts hope will eventually pressure employers to pay workers more. In previous months, wage growth numbers were being followed closely by economists and industry experts, but it has remained stagnant.

Did wage growth inch higher in September as it did in August?

Wage Growth Meets Expectations

August saw year-over-year wage growth reach a 9 year high, and once again everyone was looking forward to seeing this number for September.

Last month, wage growth was 2.8%, down from August. And while this may appear to be a big negative, the results actually met estimated set by various experts and publications.

Still, wage growth isn’t showing the increases experts predicted based on the low unemployment rate and increased competition for talent. However, most economists believe that it is only a matter of time before employers are pressured into boosting wages and compensation to keep up with employee expectations and demands.

Labor Market Growth Slows in September

August saw job creation exceed estimates with 201,000 created. September’s results weren’t nearly as positive.

Labor market growth greatly missed expectations, with 134,000 new jobs created. Estimates had this number coming in between 168,000 and 185,000.

The September results are also the lowest since September 2017, when 14,000 jobs were added (which was weighed down by a significant labor strike).

Clearly these results are not what experts had wanted to see, but not everyone seems too concerned.

"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 at 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."

The Economy and Labor Market Continue to be Strong

Despite some subpar results, both the Labor Market and United States Economy continue to be strong. September extended the streak of monthly job growth to 8 years which is double the previous record.

Time will tell how unemployment, job growth, wage growth, and other economic/labor indicators fair in October.

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