The unemployment rate declined to 3.5% in September, according to the latest jobs report from the U.S. Department of Labor [1], while average hourly earnings for all employees on private nonfarm payrolls were little changed at $28.09. Doug Duncan, Chief Economist at Fannie Mae, discussed what this month’s numbers indicate.
“Today’s jobs report is consistent with our outlook of a gradually slowing growth path,” Duncan said in a statement. “The household survey was generally positive, with the unemployment rate falling to the lowest level in nearly five decades and labor force participation holding steady. However, some of the underlying details paint a mixed picture.”
“The report does little to clarify the divergent views on the Federal Reserve about whether the economy is slowing or not, but we continue to believe the Fed will cut rates this quarter due to trade uncertainties and weak manufacturing data,” Duncan adds.
According to First American Deputy Chief Economist Odeta Kushi, September Jobs report signaled good news for the economy, labor force and consumer buying power, citing unemployment’s drop to a five-decade low
““The prime-age labor force participation rate, one of the primary indicators for the health of the labor market, is up 0.8 percentage points compared to one year ago,” Kushi stated. “This means more jobs and wage growth may be on the way, and is another positive sign for the health of the overall economy.”
“However, the prime-age labor force participation must continue to rise for wage growth to continue its upward trend,” she adds. “While the prime-age labor force participation rate remains below the 2007 level and the long-run trend, if we see continued growth to 83%, it could push wage growth (for all production and nonsupervisory employees on private nonfarm payrolls) to as high as 3.8%.”