Job growth drops, but US hir­ing steady

The Bradenton Herald - - Nation & World - BY CHRISTO­PHER RU­GABER

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 Fri­day, send­ing the Dow Jones av­er­age down 560 points, or 2.2 per­cent, 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 Fri­day 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 per­cent 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 Ash­worth, an econ­o­mist at Cap­i­tal Eco­nomics, said in a re­search note.

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