U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.
The Labor Department's closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.
Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment.
The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.
Fed Chairman Jerome Powell said on Tuesday that the economy's outlook was remarkably positive and he believed it was on the cusp of a historically rare era of ultra-low unemployment and tame inflation.
The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining accommodative.
The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.
