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Nation & World

Job growth cools

Unemployment rate drops to 3.7 percent

Reuters

Fed Chairman Jerome Powell says he believes the economy is on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.
Reuters Fed Chairman Jerome Powell says he believes the economy is on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

WASHINGTON — U.S. job growth slowed sharply in September as Hurricane Florence depressed restaurant and retail payrolls. But the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday 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.

Nonfarm 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.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York.

“There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-10th of a percentage point, to 3.8 percent.

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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 U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

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