US unemployment rate remains near historic low despite concerns over trade tensions
The US Bureau of Labor Statistics is set to release today the country’s employment statistics for September.
In August, the economy added 130,000 new jobs, down from the 159,000 that were added in July. With the unemployment rate holding steady at 3.7%, all indications point to the fact that firms are more measured in hiring employees due to the Trump administration’s inconsistent trade policies.
Moody’s Analytics estimated that the trade war with China has cost the US some 300,000 jobs this year—a figure that could rise to 450,000 as the year closes out. Should the dispute continue into the next fiscal year, 900,000 fewer jobs could be created.
With the aforementioned rate of hires slowing down, especially among smaller businesses, business confidence will continue to erode, while overall capital expenditures by said businesses will decrease over the next three to six months.
In light of this, expect the number of new jobs to continue to decline for September as the effects of the trade war continue to be felt with domestic growth continuing to decelerate. This will lead to a slowdown in wage growth. Despite this, the US Federal Reserve has signalled that it will not cut rates in the year 2020, having done so twice this year.
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