The American economy is slowly approaching full employment status.
September 2019 marked a 0.2% drop in the unemployment rate. That seems a small drop, but the rate was already low – historically low in August. As of September, only 3.5% of Americans are jobless. That’s the lowest percentage since December 1969. It took the US economy five decades for employment to bounce back to that record-breaking year.
Not only did the unemployment rate fall, but the percentage of underemployed and discouraged workers is poised to match its all-time low of 6.8%. It currently hovers at 6.9%, down from 7.2% in August. Hispanic and African American unemployment rates are at historic lows.
Healthcare led the market with the most new employees, while more than 11,000 people lost their jobs in retail. Retail continues to shed workers – 197,000 employees during the past two years.
Overall, there has been less job creation during 2019 than in 2018: 161,000 compared to 223,000. But with four months until the end of the year, that number could still be reached.
Countering all of this good news from the Labor Department are concerns that the economy is slowing down and is in danger of dropping into a recession. Economists expected a larger drop in the unemployment rate. They thought nonfarm payrolls would grow further. So although September’s unemployment figures have hit a 50-year low, job growth from August to September was minuscule.
“The labor market is still strong, adding more than enough jobs each month to absorb new entrants to the labor force. But even with a strong labor market, wage growth remains muted, limiting the risk that labor market tightness will push inflation meaningfully higher. The question that matters most for the economy is how long the labor market can stay strong given the ongoing slowdown in growth,” said Eric Winograd, senior U.S. economist at AllianceBernstein. Bernstein doesn’t expect the economy to experience any large changes in the near future.
Analysts agree that the market is at one of its healthiest points and there are no fears that Federal Reserve will institute any further interest rate cuts by the end of the year. On the other hand, finding new highly skilled workers continues to get tougher. And the slow growth of wages and prices suggests that there is no sign of impending inflation.