US unemployment drops to lowest since 1969

(CNN) — Amid signs that the global economy is slowing, America’s labor market nonetheless remains strong.

In September, the unemployment rate fell to 3.5%, the lowest rate since December 1969, as employers added 136,000 jobs to the US economy.

The pace of hiring has slowed considerably since 2018, when the economy added an average of 223,000 jobs per month. The September jobs report comes in the same week in which a series of economic reports showed the US economy is slowing and reinforced fears of a looming recession.

Activity in American’s factories has declined for two straight months, and the biggest piece of the economy, the services sector, is growing at its weakest pace in three years. Businesses expressed concern about tariffs, a shortage of workers and the direction of the economy.

Despite cracks showing in the economy, hiring has long been a consistent bright spot. As companies fight for talent, paychecks have grown, giving more spending power to consumers, which has kept the economy growing even as the trade war hurts US manufacturing and farming.

This most recent report from the Labor Department showed some encouraging signs: July and August’s jobs reports were revised higher by a combined 45,000 jobs. Hispanic unemployment fell to 3.9%, setting a record low, while black unemployment remained at a record low of 5.5%. Minority unemployment has been tracked by the Labor Department since the early 1970s.

The nation’s underemployment rate, which looks at people who are unemployed as well as those who are working part time but would prefer full-time work, fell to 6.9%. That’s the lowest reading for that measure since December 2000.

The unemployment rate for adults with less than a high school education fell to 4.8%, the first time that measure has ever been below 5% on data going back to 1992.

The economy also benefited from 1,000 new positions from the US Census.

However, the massive GM strike, in which about 50,000 people joined picket lines, was not counted in this month’s report.

A bleaker point in the report was wage growth.

Average hourly wages didn’t grow between August and September. Over the past year, wage growth ticked up just 2.9%, which was lower than expected and the weakest growth since July 2018.

Still, on the whole, “this is not that weak of a report, despite the ebbing in job growth,” Sal Guatieri, senior economist at BMO, wrote in a note to clients.

That said, weakening domestic and foreign demand in light of the trade war will add uncertainty for companies and increasingly weigh on job growth, Guatieri said.

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