Unemployment rate drops to 3.7%, lowest in nearly half a century

The unemployment rate dropped to a half-century low in September, the Labor Department reported Friday. However, there was an increase in the number of people working part-time who want full-time work.

The unemployment rate is now at 3.7 percent, the lowest rate since December 1969, when the jobless rate was 3.5 percent. That's despite September hiring being slower than expected. "The fall in the unemployment rate is largely due to the 'right' reasons: people finding work (i.e. not because people gave up looking)," wrote Elise Gould, senior economist at the Economic Policy Institute. 

Unemployment fell broadly, indicating that workers across all levels of education are finding work.

"Over the last six months to a year, the market has really tightened at the lower-experience level," said Cathy Barrera, chief economist for ZipRecruiter, an online job platform. "That's really good news for people with less education and also young people." 

Only 134,000 jobs were added, while economists had been expecting about 180,000 jobs to be added. Most say it's a temporary dip, blaming the effects of Hurricane Florence, which battered and flooded the Carolinas in mid-September, during the time the national jobs survey is conducted. Businesses that close temporarily can have a big impact on the jobs numbers, Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note. 

"[T]he official data only include people who were paid something - anything - in the survey period," he wrote. People "who could not work because of the storm therefore disappear temporarily from the BLS numbers." 

Other data show the economy roaring ahead. Earlier estimates for job creation in July and August were revised up, so that on average, businesses added nearly 200,000 jobs per month this year — well above the number needed to keep up with a growing population.

Average earnings grew 2.8 percent year-over-year. While that's still lower than what economists would expect with a rock-bottom unemployment rate, it's an improvement from the 2.0 percent wage growth seen at the start of this year. Economist Justin Wolfers said September's data pushes up annualized wage growth over the last three months to a healthy 3.8%. 

This is a developing story.

In:
• Economy
• Unemployment