BLS Releases September 2018 Employment Data (Oct. 2018)
The Bureau of Labor Statistics reported that the unemployment rate fell to 3.7 percent in September, its lowest level since 1969. The report indicated that some slowing of job growth occurred during the month with employers adding 134,000 jobs. This figure may have been reduced by the Hurricane Florence hitting the Carolinas. Job growth estimates for July and August were revised upward by 87,000, bringing the three-month average to 190,000. This pace of nonfarm job growth at 1.7 percent has remained little changed over the last couple of years. Thus far, 2018 is shaping up to be one of the stronger years of job growth since the Great Recession.
Job growth was strong in the goods producing sectors but generally weak in the services sectors. Construction added 23,000 jobs in September; while manufacturing and mining and logging added 18,000 and 5,000 jobs respectively. While employment growth was strong in these sectors, it was accompanied by a drop in hours, resulting in the index of aggregate hours falling in both construction and manufacturing, as did average weekly pay. On the services side, retail lost 20,000 jobs while restaurants lost 18,200 jobs. Both of these sectors most likely were affected by the hurricane, disrupting hiring in these high job turnover sectors. Health care added 25,700 jobs in September and state education added 21,200 jobs; the latter due most likely to seasonal adjustment issues.
In spite of the unusually low unemployment rate there is sparse evidence for wage acceleration. Year-over-year increase in the average hourly wage was 2.8 percent; down from last month’s 2.9 percent. However, the annualized increase for the last three month average (July, August and September) compared with the previous quarter (April, May and June) is 3.4 percent. Most gains are only marginally higher than the inflation rate.
The 3.7 percent unemployment rate is the lowest in nearly a half century. Broader measures of unemployment—which include discouraged workers who have given up looking for work—declined to its lowest level since 1994. The broadest measure of underemployment, which includes part-time workers who would like full-time work, still remains higher compared to the late 1990s and early 2000s. The share of the population that is in the labor force—defined as those working or actively searching for work—has remained slightly lower than 63 percent this year. This labor force participation rate has not seen much improvement, nor conversely deterioration over the last five years. Unemployment rates have trended downward for workers of all races and genders in recent years. The unemployment rates for white women, black men and Hispanic women are all at their lowest levels in several decades.
The full press release on the September 2018 employment situation can be accessed in the pdf below.
The next employment situation report for October 2018 is scheduled to be released on Friday, November 2, 2018.