Daily Management Review

US Unemployment Rate Hits A Record 49 Year Low


10/09/2018




US Unemployment Rate Hits A Record 49 Year Low
The employment scenario in the United States was hardly much better than it is now.
 
With a fall in the rate of unemployment and reaching 3.7% in September, it touched the lowest point since the rate was so low in December of 1969.
 
Despite being below expectations and lower than the monthly average for the year, 134,000 new jobs were created in the US economy last month. There was little fall in the rate of creation of new jobs in the leisure and hospitality segment probably because of the impact left by Hurricane Florence, the Labor Department said. This market segment had noted an increase throughout the last several months.
 
Experts said that the argument that the greater availability of workers was making it difficult for employers to create new jobs was supported by the historically low rate of unemployment rate but the relatively weak growth in the number of new jobs. During the entire year, the employers have been more prone to look at job seekers than they were keen to not look at certain sections of candidate such as those with a criminal record. In the past two months, there has also been a significant increase in the recruitment of the number of people with disabilities.
 
There has however been no growth in wages. During the last year, there has been a 2.8% increase in the average hourly earnings. This rate is just over last year’s average and lower compared to the growth a month earlier. However, inflation has not been incorporated into the numbers which has reduced wages during the last number of months even as there has been rate hikes by the Federal Reserve in accordance to a strengthening economy.
 
Some of the other aspects of employment have however shown positive results like the real personal disposable income – which incorporates the income after deduction of taxes, and the employment cost index which takes into account the cost of fringe benefits such as employee healthcare contributions.
 
Here are indications of greater strength than depicted by the official numbers as deducted from the reporting of the salaried people, said Andrew Chamberlain, chief economist of the employee review site Glassdoor.
 
"It's still relatively slow, but it's building," Chamberlain says, expressing confidence that the Labor Department's hourly earnings measure will break the 3.0% threshold soon. "I'm not sure there's much slack left to wring out of this labor market."
 
This argument apparently is echoed in the sentiments of the Wall Street. The jobs report has been followed by a spike in bond yields as a seven year high was hit by the benchmark 10-Year Treasury at 3.24%.
 
Investors feel that the Fed would again raise the rates in December and again a number of times next year also. The result was a fall in stocks. There was a drop of over 200 points in the Dow in mid-afternoon trading.
 
(Source:www.cnn.com)






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