JOB GROWTH SLOWS

Un­em­ploy­ment rate stays at 3.7%

Boston Herald - - BIZSMART -

WASH­ING­TON — U.S. job growth de­clined mod­estly in Novem­ber, a move that could sig­nal a slower but still steady pace of hir­ing and growth next year.

The po­ten­tial for a more ane­mic econ­omy con­trib­uted to a sharp drop in the stock mar­ket yesterday, send­ing the Dow Jones av­er­age down al­most 560 points, or 2.2%, by mar­ket close.

Yet most economists said last month’s job gain of 155,000 is more sus­tain­able than some of the larger in­creases posted ear­lier this year. And hir­ing at last month’s pace would make it eas­ier for the Fed­eral Re­serve to slow its in­ter­est rate in­creases, which in­vestors worry are weigh­ing on the econ­omy.

“This is the new Goldilocks,” said Josh Wright, chief economist at iCIMS, a re­cruit­ing soft­ware com­pany. “Still, strong-enough job growth, but a more cau­tious Fed.”

The un­em­ploy­ment rate stayed at 3.7 per­cent, a nearly five-decade low, for the third straight month, the La­bor Depart­ment said yesterday in its monthly jobs re­port.

Still, the pan­icky fi­nan­cial mar­kets il­lus­trate how the views of Wall Street and most of the rest of the U.S. can dif­fer.

For most Amer­i­cans, jobs and in­comes are the most im­por­tant eco­nomic mea­sures. Av­er­age hourly earn­ings in­creased 3.1% in Novem­ber from a year ear­lier, Fri­day’s re­port said, only the sec­ond time they have climbed that much since the re­ces­sion ended nine years ago.

That’s boost­ing con­sumer con­fi­dence to nearly 18-year highs, spurring more spend­ing, and bol­ster­ing win­ter hol­i­day shop­ping. Amer­i­cans lifted their spend­ing in Oc­to­ber by the most in seven months.

“We’re still a lit­tle sur­prised to see such a grow­ing panic in mar­kets de­velop quite so soon given the rel­a­tively be­nign eco­nomic back­drop,” Paul Ash­worh, an economist at Cap­i­tal Eco­nomics, said in a re­search note.

Yet for Wall Street, higher pay can crimp cor­po­rate profit mar­gins. Many large, pub­licly-traded com­pa­nies are hit by slower growth in places such as Europe and Ja­pan. They are also more di­rectly af­fected by tar­iffs that the Trump ad­min­is­tra­tion has im­posed on a range of im­ports.

“There is a dis­con­nect be­tween the gloom and doom en­vi­ron­ment in fi­nan­cial mar­kets and real eco­nomic con­di­tions,” said Gad Le­vanon, chief economist at the Con­fer­ence Board, a re­search group.

AP FILE PHO­TOS

STEADY: A job ap­pli­cant car­ries hand­outs in Mi­ami Lakes, Fla. Job growth has stead­ied, ac­cord­ing to the lat­est job re­port from the La­bor Depart­ment.

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