US jobless rate near 50-year low, but Fed should keep cutting rates

Washington - However, wage growth stagnates and manufacturing payrolls decline for the first time in six months

US job growth increased moderately in September, with the unemployment rate dropping to near a 50-year low of 3.5 per cent, assuaging financial market concerns that the slowing economy was on the brink of a recession amid lingering trade tensions.
The Labor Department's closely watched monthly employment report on Friday, however, showed wage growth stagnating and manufacturing payrolls declining for the first time in six months. The retail sector also continued to shed jobs.
The report came on the heels of a string of weak economic reports, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016, that heightened fears the economy was flirting with a recession.
With signs that the Trump administration's 15-month trade war with China is spilling over to the broader economy, continued labour market strength is a critical buffer against an economic downturn.
The trade war has eroded business confidence, sinking investment and manufacturing.
Nonfarm payrolls increased by 136,000 jobs last month, the government said. August data was revised to show 168,000 jobs created instead of the previously reported 130,000 positions.

Keep cutting rates
Meanwhile, White House trade adviser Peter Navarro said in a television interview on Friday the low US unemployment rate and steady job growth should not deter the Federal Reserve from lowering interest rates.
"This number, even though it's a very good number, should not deter the Fed from aggressively lowering its rates for one simple reason - not because the economy is slowing down - but because our dollar is so overvalued, it's killing our exports," Navarro said in the CNN interview.
Separately on Friday, roughly half of Dutch cheese exports to the US will be affected by a 25 per cent tariff Washington has threatened to slap on European food products, the Dutch Trade Ministry said.
Around 39 million euros worth of cheese destined for US markets will fall under the new tariff set to be implemented on October 18.