October 8, 2018 — September Jobs Increase Falls Short Due to Hurricane

OCTOBER 8, 2018 – SEPTEMBER JOBS INCREASE FALLS SHORT DUE TO HURRICANE

The big job news for September was the unemployment rate fell to 3.7 percent, the lowest since 1969.  With the Trump tax credits in play and a tight labor market, forecasters predict the unemployment rate will fall even further in the coming months.

However, only 134,000 new jobs were created last month, below consensus estimates of 175-180,000.  The rollback is attributable, in part, to the impact of Hurricane Florence; results are typical in a post-storm environment.  For example, leisure and hospitality hiring was down 17,000 last month, a massive shift from gains of 20,000 jobs/month that have been the norm lately.  The Labor Department also revised July and August hiring figures upwards by 8,000 and 69,000 new jobs, respectively, indicating businesses are continuing to hire.

Wages continue stagnate at annualized increase of 2.8 percent, down from 2.9 percent in August, which was the highest in nine years.  Fed Chair Powell said more wage growth is welcome, but he doesn’t see it causing inflation yet. There is no expectation for the Fed to raise rates faster unless inflation unexpectedly takes off.  The next hike will likely occur in December, followed by two more in the first half of 2019.

 

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