The Labor Department released its official hiring and unemployment figures for September on Friday, providing the latest snapshot of the American economy.
■ 134,000 jobs were added last month. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.
■ The unemployment rate was 3.7 percent. August’s jobless rate was 3.9 percent.
■ Average earnings rose by 8 cents an hour and are up 2.8 percent over the past year.
An eight-year recovery makes the labor market tight.
September marked the 10th anniversary of the collapse of Lehman Brothers and the start of the financial crisis. It also represented a milestone in the remarkable rebound that followed: eight straight years of monthly job growth, double the previous record.
By nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. The unemployment rate is close to a two-decade low. Job growth has repeatedly defied economists’ predictions of a slowdown. African-Americans, Latinos and 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.”
Where is the wage growth?
Those good times, however, have not yet translated into robust pay gains for many workers. The slow pace of wage growth has been a persistent source of disappointment in the recovery, and economists have long looked for evidence that the tight labor market is at last forcing companies to hand out raises.
“We are seeing some acceleration in average hourly earnings, maybe not as much as we would expect given how tight labor markets are,” said Ben Herzon, an economist for Macroeconomic Advisers.
The long-awaited pickup may already have begun. Amazon announced this week that it would raise wages for all its employees in the United States to at least $15 an hour.
But while faster wage growth would be good news for workers, it could worry policymakers at the Federal Reserve, who are watching for signs that the economy is “overheating” — that is, that the tight labor market and strong economy are sowing the seeds for faster inflation down the road. If those concerns mount, the Fed might raise interest rates more quickly than planned, which could bring the recovery to an end.
So far, there isn’t much evidence of that happening. The Fed raised interest rates last month as expected, but has thus far been content to move slowly. Jerome Powell, the Fed chairman, said this week that the economy was good but “not too good to be true.”
Hurricane Florence may have caused some distortions.
Take extra care interpreting September’s jobs figures because of Hurricane Florence, which hit the Carolinas in the middle of the month. Natural disasters can affect employment numbers in various ways: interfering with data collection, disrupting hiring and putting people temporarily out of work as businesses shutter and residents evacuate.
Last year, the storms that hit Florida and Texas wreaked havoc on September’s employment data. The government’s initial report showed an unexpected net loss of jobs for the month; that figure was later revised up to show a tiny gain. Roughly 1.5 million people reported being unable to work because of the weather.
This year, the impact was probably more modest. Florence affected a smaller part of the country than last year’s storms, and hit at a time in the month when it is less likely to disrupt data collection or measurement. Still, the storm may have muddied measures of earnings and working hours.
Midterm elections are approaching.
Friday’s report is one of the last major economic releases before November’s midterm elections. The next round of jobs data will come four days before Election Day, by which point most voters’ minds may be made up.
Republicans are counting on the strong economy to help hold off a potential “blue wave” of Democratic victories in the House and Senate. President Trump has repeatedly played up the low unemployment rate as evidence that his policies are working. It isn’t clear, however, that economic data will have much effect at the polls. Surveys show that views of the economy are split along partisan lines, with Democrats and even many independents expressing less optimism than Republicans.