The US unemployment rate fell to its lowest level in nearly 17 years in October while job creation resumed climbing after the two late-summer hurricanes, the Labor Department reported Friday. The jobless rate fell to 4.1 percent, down a tenth of a point from September, the lowest the US economy has seen since December 2000.
Employers added 261,000 net new positions as businesses reopened in the wake of Hurricanes Harvey and Irma, although the rebound was much lower than economists had forecast. The result still showed US labor markets in good health, easily bouncing back from the storms that idled the US energy hub in southeast Texas and forced millions of Floridians to flee their homes.
The data for September also turned out not be as bad as initially reported, with 18,000 new jobs created, rather than a loss of 33,000 positions, the first contraction in nearly seven years. Economists, however, had expected an even bigger October rebound from the storms, with a consensus forecast calling for 300,000 net new positions.
The falling unemployment rate was likely to sharpen debate among Federal Reserve policymakers, who appear likely to raise the benchmark US interest rate next month despite doggedly low inflation which a vocal minority argues should keep the Fed on hold.
Since January, unemployment in the US has fallen by seven tenths of a percentage point, and more employers say positions are increasingly difficult to fill amid a scarcity of qualified labor. Wages pressures in October were flat, however, with average hourly earnings falling by a penny to $26.53.
But economists said the hurricanes distorted wage calculations, with average compensation rising in September because fewer hourly laborers were able to work, and then falling as they returned to their jobs. Employment in bars and restaurants sharply rebounded from the hurricanes, adding 89,000 positions in October following September’s 98,000 decline.