US adds 128k jobs, jobless rate inches up to low 3.6%

Without the impact of the General Motors strike, employment in the US manufacturing sector would have risen last month. PHOTO: AGENCE FRANCE-PRESSE
Without the impact of the General Motors strike, employment in the US manufacturing sector would have risen last month. PHOTO: AGENCE FRANCE-PRESSE

Rosy data defies economists' expectations of a sharp slowdown amid US-China trade war

WASHINGTON • The US labour market took a punch last month from an extended strike at General Motors (GM), but the economy continued to add jobs at a solid pace, according to official data released yesterday.

The steady hiring showed that demand for workers remained resilient despite President Donald Trump's protracted trade war with China.

Employers added 128,000 net new jobs, the Labour Department reported in the closely-watched monthly employment report, defying many economists who expected a sharp slowdown.

And gains in the prior months were revised up sharply and wages continued to climb, making the jobs picture even stronger.

Meanwhile, the jobless rate rose a notch to a still-low 3.6 per cent, as expected. The 3.5 per cent unemployment rate in September was the lowest since 1969.

Nearly 50,000 GM workers were called back to work this week following a 40-day strike, but the stoppage put a deep dent in the auto industry employment levels last month.

The ranks of auto workers shrank by more than 41,000, according to the report - the biggest drop in that sector since October 2009, when the American auto giant was at the brink of collapse.

Without the impact of the GM strike, employment in the US manufacturing sector would have risen last month. Hiring was also strong in other sectors, averting the dire outcomes some economists had predicted, as bars, restaurants and financial services companies continued to snap up new workers.

And the gains came despite the fact that federal government hiring of temporary workers ahead of the census next year has ended, removing the temporary boost of prior months.

Even with the GM strike, employment in August and September were revised up by a combined 95,000, the Labour Department said.

Overall, job growth has slowed this year to a monthly average of 167,000, compared with 223,000 last year, as the supply of available workers dwindles and skittish companies hold off on adding workers amid concerns about the US-China trade war. But low unemployment and steady job growth should continue to support consumer spending, which represents the lion's share of US economic activity.

Overall, job growth has slowed this year to a monthly average of 167,000, compared with 223,000 last year, as the supply of available workers dwindles and skittish companies hold off on adding workers amid concerns about the US-China trade war.

But low unemployment and steady job growth should continue to support consumer spending, which represents the lion's share of US economic activity.

Compared to October last year, workers' pay rose 3 per cent, meaning year-on-year wage gains have been at or above 3 per cent for 15 straight months.

The Federal Reserve this week cut interest rates for the third time in a row, moving to shield the economy from a global slowdown and the effects of the trade wars.

But Fed chairman Jerome Powell signalled on Wednesday that the central bank likely will hold off on providing any further stimulus to the economy.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on November 02, 2019, with the headline 'US adds 128k jobs, jobless rate inches up to low 3.6%'. Print Edition | Subscribe