US job growth cools but jobless rate falls to 3.7%

US job growth slowed sharply last month, likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to a 49-year low of 3.7 per cent.

The US Labour Department's closely watched monthly employment report yesterday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Non-farm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

Fed chairman Jerome Powell said on Tuesday that the economy's outlook was "remarkably positive" and he believed it was on the cusp of a "historically rare" era of ultra-low unemployment and tame inflation.

The US central bank raised rates last week for the third time this year.

The drop of 0.2 percentage point in the unemployment rate from 3.9 per cent in August pushed it to levels last seen in December 1969 and matched the Fed's forecast of 3.7 per cent by the year end.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 06, 2018, with the headline 'US job growth cools but jobless rate falls to 3.7%'. Print Edition | Subscribe