The Oklahoman

Forget about repeating 2018’s strong job gains, economists say

- BY JEFF KEARNS

As the U.S. wraps up a year of surprising­ly strong job growth, such gains are unlikely to repeat in the next 12 months with economic headwinds intensifyi­ng for the country and rest of the world.

The final report for 2018 is forecast to show employers added 180,000 jobs in December to cap a 2.45 million annual increase, the most since 2015 — but the monthly estimate is the lowest median projection since last January. Economists surveyed by Bloomberg expect that to slow in 2019 to an average monthly pace of 156,000, for a 1.87 million total followed by 1.44 million in 2020, when President Donald Trump is up for re-election.

Other key labor measures aren't expected to improve far beyond current levels by year end. Economists project the jobless rate held in December at 3.7 percent, the lowest since 1969, and will edge down to 3.5 percent at the end of 2019. Wage gains in December are estimated to ease to 3 percent yearon-year from a postrecess­ion high of 3.1 percent, before a modest re-accelerati­on during the year.

The prospect of less robust job growth is the latest in a series of risks stacking up for the world's largest economy even as it heads for its longest expansion on record. It comes alongside warning signs from housing to manufactur­ing and projected weakening in both U.S. and global growth this year. A waning boost from Trump's tax cuts and government spending will add to the challenges for policymake­rs.

"The economy accelerate­d in 2018 and employment with it for a pretty simple and obvious reason: We had a pretty big fiscal stimulus," said Lewis Alexander, chief U.S. economist at Nomura Securities Internatio­nal Inc. in New York. "The boost to growth from fiscal policy is not sustainabl­e," he said, adding that he expects slowing of both the economic expansion and employment growth.

Data released Thursday by the ADP Research Institute showed companies added the most workers in almost two years to U.S. payrolls in December. Private payrolls increased by 271,000, exceeding forecasts, after a downwardly revised 157,000 advance in November.

A separate report Thursday from the Labor Department showed filings for unemployme­nt benefits rose to a fourweek high of 231,000 in the week ended Dec. 29, exceeding the median estimate of economists in Bloomberg's survey.

Barclays sees payroll growth slowing from an average pace of around 200,000 last year to about 160,000 a month this year.

"Our outlook for slower growth in activity in 2019 relative to last year on account of a smaller impulse from fiscal stimulus leads us to expect less employment growth this year," Chief U.S. Economist Michael Gapen said in a note.

The jobs report for November showed a payrolls increase of 155,000, a tally that missed all estimates in Bloomberg's survey calling for a gain of 198,000. The same report revised the October reading down to 237,000 from 250,000.

Maintainin­g strength in hiring may depend on continued contributi­ons in key sectors such as manufactur­ing, which even before the December figures had added more jobs than any year since 1997. Friday's Labor Department report, to be released at 8:30 a.m. in Washington, is forecast to show factory jobs rose by 20,000, which would bring the full-year increase to 269,000.

 ?? [PHOTO BY LUKE SHARRETT, BLOOMBERG] ?? A recruiter wears an electronic tag that reads “Work” during a Job News USA career fair in Jeffersonv­ille, Ind.
[PHOTO BY LUKE SHARRETT, BLOOMBERG] A recruiter wears an electronic tag that reads “Work” during a Job News USA career fair in Jeffersonv­ille, Ind.

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