U.S. job growth slows in November, monthly wage gains modest

Muriel Colon
December 9, 2018

US employers added 155,000 jobs in November, missing Wall Street's expectations for an increase of 200,000 jobs, after an already rocky week for stocks exacerbated on Thursday by investor fears that a U.S-China trade deal could be reneged amid newly inflamed tensions. The number of long-term unemployed declined by 120,000, suggesting that numerous new jobs went to people who had been out of work for more than 27 weeks.

Though the unemployment rate remains at a historically low 3.7 percent, there are plenty of potential workers on the sidelines who could contribute to employment growth in the future.

Americans got another positive jobs report on Friday - but it was full of warning signs that the economy is beginning to stutter.

In stark contrast to the BLS figures, ADP said manufacturing grew by only 4,000 jobs in November. An early Thanksgiving is expected to have boosted retail employment while transportation and warehousing payrolls probably rose, driven by seasonal hiring.

Normal hourly profit rose six pennies, or 0.2 percent in November.

Average hourly earnings are seen up 0.3 percent in November after gaining 0.2 percent in October.

Retailers showed solid demand for workers overall, hiring 18,200 people in the month before Christmas.

U.S. companies likely maintained a solid pace of hiring in November while increasing wages for workers, suggesting the economy remains strong enough for the Federal Reserve to continue raising interest rates in 2019.

The low unemployment rate and the consistent employment gains which have exceeded 100,000 jobs every month this year are testaments to the effectiveness of the Administration's economic policies. The Fed increased rates for the third time this year in September. Recent lows were also achieved for the unemployment rate among individuals with a high school degree but no college, whose November unemployment rate fell to 3.5 percent-the lowest since December 2000.

Construction firms cut back, however, adding just 5,000 jobs, the fewest in five months. The economy developed at a 3.5 percent pace in the second from last quarter.

US work development hindered in November and month to month compensation expanded not exactly expected, proposing some control in monetary action that could bolster desires for less loan cost increments from the Federal Reserve in 2019.

"Since the Fed is now very data-dependent, stronger data should give the market more confidence that the Fed will continue hiking in 2019", said Veronica Clark, an economist at Citigroup in NY.

Stocks have been harmed by vulnerability whether a 90-day ceasefire concurred by U.S. President Donald Trump and Chinese President Xi Jinping throughout the end of the week will hold and lead to an enduring facilitating of exchange pressures between the world's two biggest economies. That typically signals a weaker economy ahead.

"With home-price growth also slowing and mortgage rates easing a bit, sustained wage growth of better than 3 percent certainly helps affordability conditions as we head into 2019", Fratantoni said.

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