US Hiring Slows to 155,000 Jobs in November

December 8, 2018

By Jim Puzzanghera

WASHINGTON — Job growth slowed significantly in November but still was solid, indicating the economy remains in good shape but not expanding so quickly that it will lead to sharply higher interest rates.

U.S. employers added 155,000 jobs last month, well below analyst expectations and a steep decline from October’s strong 237,000 figure, the Labor Department reported Friday.

Still, monthly job gains are averaging 206,000 this year, the best since 2015. Even the slower pace of 170,000 over the last three months is close to last year’s average of 182,000 and well above the amount needed to keep up with population growth.

The unemployment remained at 3.7 percent, the lowest since 1969. Wages grew at a robust 3.1 percent in the 12 months ended Nov. 30, matching the year-over-year pace from the previous month.

Michael Gapen, chief U.S. economist at Barclays Investment Bank, said the report showed that the labor market remained healthy.

“Solid employment growth, on average, is also keeping household income growing at a decent clip,” he wrote in a research note.

Investors initially reacted positively Friday, seeing the report as adding to recent signals from Federal Reserve officials that they will slow their pace of interest rate hikes next year.

The Dow Jones industrial average was headed for an open that was down 200 points. That reversed after the report was released and the Dow was up modestly in early trading before turning negative.

That downturn came after a turbulent Thursday session in which a steep decline based on trade concerns was eased by indications Fed policymakers were rethinking the projected path for a key interest rate.

“The stock market has been volatile the last few weeks and today’s strength in the employment data will go a long way to calming jittery investor fears,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Fed officials still are expected to nudge up their benchmark short-term rate later this month, the fourth small hike this year. But investors are anticipating a pullback from a forecast of three more hikes in 2019.

The recovery from the Great Recession is approaching the longest in U.S. history and showing signs it has peaked after a boost this year from Republican tax cuts.

The economy grew at a 4.2 percent annual rate in the second quarter, the fastest since 2014. But the rate slowed to 3.5 percent in the third quarter as the initial stimulus from the tax cuts faded. Economists are forecasting the rate to slow further in the fourth quarter, to about 2.6 percent.

On Friday, the Business Roundtable — an organization of chief executives of the nation’s largest companies — forecast the economy would grow at a 2.7 percent rate next year.

Jamie Dimon, chief executive of JPMorgan Chase & Co. and the trade group’s chairman, said Friday he was not worried about the disappointing jobs report.

“We’ve had some slightly weaker numbers this quarter but that just might be a bump in the road,” he said.

The Business Roundtable’s economic outlook index declined for the third straight time, although it remained high, as chief executives reported labor and material costs were their top cost pressures.

Those results reflect the strong jobs market, which is forcing companies to pay higher wages to lure and retain workers, as well as the spillover from the U.S. trade war with China. The tit-for-tat tariffs between the two countries is leading to rising costs for key materials.

Josh Bolten, the Roundtable’s president, said that “trade policy remains a noticeable headwind.”

The U.S. and China declared a 90-day truce in their trade war after President Donald Trump and Chinese President Xi Jinping met at the Group of 20 summit last weekend. But differing interpretations of what was agreed to at the meeting begin roiling financial markets on Monday. Trump further inflamed the fears by declaring on Tuesday that he was “Tariff Man” and prepared to add more if the China talks did not produce results.

Bolten said his group’s members were pleased that U.S. and Chinese officials were talking despite the challenges.

“Ninety days is a short time to address the large set and very complex set of problems that we face with China in the international trading system,” he said.

Though it was not enough time to address all the problems between the two economic superpowers, Bolten said “it’s a good start.”

In addition to November’s lower job growth, the Labor Department revised the figures for the previous two months down by a combined 12,000.

Hiring in the construction industry fell off sharply, with the sector adding just 5,000 jobs after payrolls increased by 24,000 the previous month. Leisure and hospitality companies added just 15,000 jobs in November after an increase of 56,000 the previous month.

But manufacturers continued hiring at a solid pace, adding 27,000 net new jobs. That was an increase of 1,000 from October.

———

©2018 Los Angeles Times

Visit the Los Angeles Times at www.latimes.com

Distributed by Tribune Content Agency, LLC.

Economy

Senators Mark Warner and Marco Rubio Introduce Bipartisan Bill National Security
Senators Mark Warner and Marco Rubio Introduce Bipartisan Bill
January 4, 2019
by TWN Staff

On Friday, bipartisan legislation was introduced by Vice Chairman of the Senate Select Committee on Intelligence Sen. Mark R. Warner (D-VA) and Committee member Sen. Marco Rubio (R-FL) to combat tech-specific threats to national security posed by foreign actors like China... Read More

Blue Dogs Work to Restore Fiscal Responsibility to Government Budget
Blue Dogs Work to Restore Fiscal Responsibility to Government
January 4, 2019
by TWN Staff

This week, Democrats took back the majority in the U.S. House of Representatives following 2018's historic midterm elections. One of the first orders of business? Establish rules for the 116th Congress. H.Res.6, "A Resolution Providing for the House Rules of the 116th Congress," included... Read More

New Mexico State Speaker of the House Brian Egolf Discusses Education and Economic Priorities Spotlight
New Mexico State Speaker of the House Brian Egolf Discusses Education and Economic Priorities
December 21, 2018
by TWN Staff

Looking ahead to a new legislative term, The Well News had the opportunity to speak with New Mexico Speaker of the House Brian Egolf about his priorities and goals. Read More

Democrats Will Push to Restore State and Local Tax Deductions Economy
Democrats Will Push to Restore State and Local Tax Deductions
December 17, 2018
by Christina Paulos

One of the most contentious fights of the Republicans’ tax law is about to go another round. Democrats from high-tax states — including California — are preparing a new push to restore the state and local tax deduction... Read More

Big States Missing Out on Online Sales Taxes for the Holidays Economy
Big States Missing Out on Online Sales Taxes for the Holidays
December 9, 2018
by Christina Paulos

Big states such as California, New York and Texas likely will miss out on millions in sales tax revenue this holiday shopping season because they have failed to implement laws and regulations for collecting state sales tax from... Read More

US Hiring Slows to 155,000 Jobs in November Economy
US Hiring Slows to 155,000 Jobs in November
December 7, 2018
by Christina Paulos

Job growth slowed significantly in November but still was solid, indicating the economy remains in good shape but not expanding so quickly that it will lead to sharply higher interest rates. U.S. employers added 155,000 jobs last month, well below analyst expectations... Read More

Straight From The Well
scroll top