U.S. unemployment dipped to 3.7 percent in September, the lowest since December 1969, even as labor market growth contracted sharply amid tightening at stores, bars, and restaurants.

The net gain of 134,000 positions reported by the U.S. Labor Department on Friday was 27 percent lower than the average estimate of 184,000 from economists surveyed by FactSet and compares with growth of 201,000 a month before. Employment in the retail industry dropped by 20,000, reflecting rising competition from businesses like Amazon and disruption from Hurricane Florence's landfall in the southeastern U.S.

"A parting blow from Hurricane Florence rippled through the September hiring headline, but that will likely only be short-lived and recaptured with the next jobs report," said Bankrate.com economic analyst Mark Hamrick, who noted a drop of 17,000 at bars and restaurants, many of which were closed when Florence hit and during the flooding afterward.

While the topline number is still well above the level the Federal Reserve estimates is necessary to maintain stable economic growth, it reflects the escalating risks from the tariffs President Trump has imposed on steel, aluminum, and some $250 billion of Chinese imports. The duties have hammered global supply chains and pinched newer, smaller manufacturers.

Florence — which slammed into southern North Carolina with winds of up to 90 mph in mid-September — likely shaved 10,000 jobs, Robert Martin, an economist with Swiss lender UBS, estimated before the report was released. He predicted growth of 174,000 positions altogether, with robust gains outside of the manufacturing and retail industries, while other economists projected expansion of 200,000 jobs or more.

Payroll-processing firm ADP, meanwhile, said private-employer payrolls expanded by 230,000 in a report on Wednesday. Wall Street typically follows ADP's figures closely, viewing them as a potential indicator of the Labor Department's broader assessment.

ADP's September numbers were never likely to be matched, said Bankrate.com's Hamrick, since the firm counts people on payrolls while the U.S. government tallies people at work and Florence curtailed that.

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