Hiring Slows in December As Employers Add Just 145,000 Jobs
WASHINGTON — Employers slowed their hiring in December, adding just 145,000 jobs, the Labor Department said Friday.
Though the unemployment rate held at 3.5%, matching a 50-year low for the second straight month, Friday’s report suggests continued weakness in the nation’s manufacturing sector.
Economists surveyed by Dow Jones had been expecting a job growth number of 160,000, while a Reuters survey of economists had them forecasting a rise of 164,00 jobs.
Despite the modest growth in hiring in December, The Conference Board, a think tank that closely follows these reports continues to believe the labor market is in a healthy state.
The strength of the labor market will also factor into Donald Trump’s re-election chances in November, as the president has repeatedly touted economic gains as a reason he deserves a second term.
December’s drop off comes after a robust gain of 256,000 jobs in November, though that gain was attributed in part to the end of a 40-day strike by the United Auto Workers at General Motors.
Friday’s report also noted that while unemployment remains low, it has yet to result in higher hourly wages.
The pace of annual average wage growth slowed in December to 2.9% from 3.1% in the prior month, a possible sign that there is still room for additional job gains despite the economic expansion that began in the early years of President Barack Obama’s first term.
The U.S. economy added 2.1 million jobs last year, the slowest rate of hiring since 2011, and down from gains of nearly 2.7 million in 2018.
Economists suggest hiring may have slowed because the number of unemployed people seeking work has fallen by 540,000 people over the past year to 5.75 million.
With fewer unemployed people hunting for jobs, there is a potential limit on job gains.
In December, manufacturers cut 12,000 jobs, weighing down the month’s numbers. Overall, factories added just 46,000 jobs in all of 2019.
Manufacturing struggled last year because of trade tensions between the United States and China coupled with slower global economic growth. Safety problems at Boeing, related to its 737 Max aircraft, have also hurt orders for aircraft and parts.
For all this, there was some good news in Friday’s report: The leisure and hospitality sector — which includes restaurants and hotels — added 40,000 jobs. Health care and social assistance accounted for 33,900 new jobs.
Also looking up was a separate, more encompassing measure that includes discouraged and underemployed workers. It fell to 6.7%, the lowest it’s ever been in records going back to 1994.
Revisions to previous jobs reports subtracted 14,000 jobs from the prior two months, bringing the three-month average to 184,000, the smallest since July. Private employment rose by 139,000 and government payrolls increased by 6,000.
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