September's Unemployment Fell to 3.9% --- Rate Repeats 30-Year Low: Analysts See Economy Headed to Soft Landing
WASHINGTON -- The unexpected decline in September's unemployment rate doesn't mean the economy has blown off its course toward a soft landing.</br></br>The 0.2 percentage point decline reported by the Labor Department brought the jobless rate back down to 3.9% last month, matching a 30-year-low first reached in April. The jobless rate for African Americans fell one percentage point to a record low of 7%.</br></br>"The numbers tell me that we haven't landed yet and that it's somewhere off in the future, but that we're still on track," said Mark Vitner, an economist with the First Union Bank Corp. in Charlotte, N.C. Mr. Vitner, like many economists, expects third-quarter economic growth to slow to about 3.5% before speeding up to 4.1% in the final quarter. That's slightly higher than the 3% and 3.6% consensus forecasts from Blue Chip Economic Indicators.</br></br>Still, the overall drop in the jobless rate set off alarms at the Federal Reserve, which remains worried that desperate employers will boost wages and benefits to attract or retain workers, triggering inflation. The Fed has raised interest rates six times since June 1999 to slow the economy, though it has kept rates steady at its past three meetings.</br></br>Many analysts said that before raising rates again this year, the central bank would have to see a similar decline in next month's jobs data, alongside a clearer indication that labor costs were rising.