U.S. hiring slows in November
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.