U.S. unemployment rate drops to 3.7 percent in September, lowest rate since December 1969

The U.S. unemployment rate fell to 3.7 percent in September, according to today’s release from the Bureau of Labor Statistics. 

The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, in health care, and in transportation and warehousing.

The Associated Press notes that the unemployment rate is the lowest since December 1969. The AP also reports trends are looking up.

Last month, average hourly pay increased 2.8 percent from a year earlier, one tick below the year-over-year gain in August.

That figure could rise in the coming months. With the unemployment rate so low, companies are facing intense pressure to boost pay to find the workers they need. Amazon responded on Tuesday by raising its minimum wage to $15 an hour.

Consumers, business executives and most economists remain optimistic. Measures of consumer confidence are at or near their highest levels in 18 years. Retailers have begun scrambling to hire enough workers for what’s expected to be a robust holiday shopping season. A survey of service-sector firms, including banks, hotels and health care providers, found that they are expanding at their fastest pace in a decade.

Yesterday, in anticipation of today’s release, economist Bill McBride wrote at the Calculated Risk blog,  

On Friday at 8:30 AM ET, the BLS will release the employment report for September. The consensus is for an increase of 180,000 non-farm payroll jobs in September (with a range of estimates between 150,000 to 195,000), and for the unemployment rate to decline to 3.8%.

Close. See the CR blog post for links to several jobs and consumer sentiment reports bolstering the estimate.

The New York Times reports,

The 134,000 jobs that employers added in September reflected the slowest pace of growth in a year, and the growth in wages cooled slightly from August.

But there is little evidence that those mildly disappointing figures suggest a broader slowdown.

The NYT also cites reasons for optimism.

By nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. Job growth has repeatedly defied economists’ predictions of a slowdown. African-Americans, Latinos and members of other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.

“I view this as the strongest labor market in a generation,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “These really are the good times.”

The current economic expansion is already one of the longest on record, and there is no sign that it is losing steam.

Last week, the Economic and Revenue Forecast Council increased expectations for Washington’s revenue growth over the next few years. As we wrote then – and as all the accounts of today’s jobs report also state – there are risks, including notably trade and rising interest rates. But the outlook continues to look very good for the nation and state.