Job and Wage Gains Moderate as Unemployment Rate Falls to 50-Year Low

October 04, 2019

Employers added 136,000 jobs in September (compared to an average monthly gain of 223,000 in 2018), the unemployment rate dropped to 3.5%—its lowest level since 1969—and average weekly earnings increased well above the 1.7% inflation rate to 2.6% over last year.

Employers across a broad spectrum of industries appear to be taking a cautious approach to hiring with job gains focused in four industries accounting for over 80% of the September increase:

  • Health care (+38,800),
  • Professional and business services (+34,000),
  • Government (+22,000), and
  • Transportation and warehousing (+15,700).

Most other industries were little changed except for retail trade (-11,400), which has lost 60,900 jobs over the past year.

Wage growth is moderating too.  Average weekly earnings for all employees rose 2.6% in September down from the average monthly gain of 3.2% in 2018.

However, the labor market remains fairly tight as the broadest measure of underemployment fell to its lowest level (6.9%) since the bubble in 2000 and is now near its record low of 6.8%.

Looking ahead:  According to the latest ManpowerGroup report, U.S. employers expect the hiring pace to remain positive in Q4 2019, with hiring intentions improving one percentage point compared to a year ago.