US unemployment rate has fallen to the lowest level since 1969

The non-farm payroll in the United States increased by 134,000 in August, the smallest gain in a year, and a possible sign that employers are starting to struggle to fill positions. Wages increased last month and increased 2.8% over the previous year.

Economists surveyed by the Wall Street Journal were counting on 180,000 new jobs and an unemployment rate of 3.8%.

The Labor Department said it was possible that employment in some industries would be affected by Hurricane Florence, which hit the Carolinas last month. But the department could not quantify the impact. Response rates to the September surveys were within normal limits.

The revised figures show that employers created 270,000 jobs in August and 165,000 in July, a net upward revision of 87,000. In the first nine months of the year, employers added an average of 211,000 payroll every month, which far exceeds the average monthly growth of 182,000 in 2017. This runs counter to the hiring expectations of economists, which are expected to ease as the Canadian labor market expands. work tightens. US employers added to the payroll for 96 consecutive months, extending the longest continuous expansion of jobs ever recorded.

Last month, 150,000 Americans entered the workforce, keeping the percentage of US adults working or looking for work at 62.7%.

While unemployment is historically low, the activity rate of the labor force is just above the multi-year minimums. This rate is slightly up from the recent low of 62.3% recorded in 2015, but it remains close to the smallest proportion of adult participants since the late 1970s, a time when women were always more many in the labor market.

A relative abundance of Americans on the sidelines is one of the factors put forward by economists for modest wage growth, despite a record number of job opportunities and an improving economy.

The average hourly earnings of all private sector workers rose 8 cents last month to $ 27.24. This is a fairly strong wage growth for the month, but still has not increased hourly earnings by at least 3% over the year. Part of the reason is that a year ago, in September, wage gains were unusually high because of the hurricanes Harvey and Irma, which forced low-wage workers out of work and abandoned the calculation. Hurricane Florence may have had a similar effect, but for a smaller number of employees.

Since the end of the recession in 2009, wages have not increased better than 3% compared to last year. And for the last time, unemployment was just as low: in the early 2000s and the late 1960s, the wages of non-supervisors increased by 4% or more. best annual pace.

However, wage gains have accelerated recently compared with the previous expansion, and separate data from the Department of Labor show that wages have increased more rapidly over the past year for low wages and those who have not. not finished high school. These indicate a tightening labor market that will benefit those whose job prospects were much more difficult just a few years ago.

Last week, a string of gourmet sandwich shops suddenly closed in the Washington, DC area. Two days later, a former competitor, Cava Group Inc., held job fairs near displaced workers.

"We knew that a group of workers would immediately look for an opportunity," said Cava CEO Brett Schulman. "We wanted to remedy this situation, help them start a good career and tell them" We need you "."

Cava has raised her issues and offers benefits such as a health insurance and a free meal at each shift to help attract and retain workers. Follow-up interviews were offered to about half of the 50 workers who attended the fairs. At least five of them have already been hired by the Mediterranean chain.

The strong employment report probably keeps the Federal Reserve on track to gradually raise its policy rate. Last week, the Fed raised its Fed funds policy rate from 2% to 2.25%, and most officials said they plan to raise rates by another percentage point during the year. next. In a speech earlier this week, Fed Chairman Jerome Powell said he did not see the urgency of accelerating the rate of increase in rates. interest of the central bank or to signal a more restrictive policy.

"Removing housing too quickly could unnecessarily speed up expansion," Powell said. "Going too slowly could lead to higher inflation and inflationary expectations," he said. The gradual trajectory of the Fed "aims to balance these risks".

Friday's report showed that the manufacturing, construction and health care sectors created jobs last month. Retail trade, recreation and hospitality, two sectors that are likely to be exposed to bad weather, have lost jobs. All levels of government added 13,000 jobs to the public payroll last month.

The widest measure of unemployment, including those who were too discouraged to look for work, plus Americans stuck in part-time jobs but wanting to work full time, went from 7.4% the previous month to 7%. , 5%. This rate, known as the U-6, remains somewhat high compared to the last time unemployment was just as low.

Write to Eric Morath at [email protected] and Harriet Torry at [email protected]