The United States unemployment rate fell to almost 3.5 percent in September, suggesting that its current economy could avoid a recession for now, despite trade tensions that are affecting the manufacturing industry and consumer fears.
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However, the Labor's Department monthly employment report, released on Friday, indicated that wage growth stagnated and manufacturing payrolls declined for the first time in six months. Retail and utilities also continued to lose jobs.
The report followed a series of weak economic indications, including a drop in manufacturing activity to a 10-year low in September and a sharp slowdown in service industry to levels not seen since 2016, which sharpened fears that the economy was close to a recession.
According to Josh Wright, chief economist at iCIMS in New York, "the unemployment rate rises before a recession, so a further decline delays the deadline for any possible recession until the end of 2020 at the earliest."
There is also political uncertainty in Washington after the Democrat-controlled House of Representatives initiated an impeachment investigation against President Donald Trump on charges of pressuring Ukrainian President Volodymyr Zelenskiy to investigate former U.S. Vice President Joe Biden, one of the main candidates for the 2020 Democratic presidential nomination.
The U.S. central bank cut interest rates last month after reducing borrowing costs in July for the first time since 2008 to keep the economic expansion, now in its eleventh year, on track.