Unemployment rate is one of the key economic indicators of labor market. The US labor market has been constantly monitored by monetary and fiscal policy experts to guage the economic growth. Since the beginning of 2019, the US unemployment rate has been below 4%, which was recorded in the month of January 2019. Among the job sectors, non-farm sector is the most crucial sector to guage the US economic growth. Since the beginning of 2019, the US non-farm payrolls witnessed an additional 100,000 jobs with exception of February and May when the additions were just 56,000 and 62,000 respectively.
Addition of workforce to the non-farm sector has been prompting the US Federal Reserve to take cautious steps in its monetary policy. After maintaining at 3.7% for three consecutive months, the US unemployment rate for the month of September 2019 fell to 3.5%, the lowest level in more than 50 years. The previous lowest unemployment rate recorded was at 3.4% in September 1968. When the rate fell to more than 50 years low of 3.5%, the addition of workforce to non-farm sector was 136,000 thereby making employment-population ratio to 61%. The other economic indicators are not showing better picture for the US economy and the question arising now is it bottoming of lower unemployment rate for the US. (The author is Head - Commodity Research at Karvy Comtrade Limited)