U.S. adds 155,000 jobs, be­low ex­pec­ta­tions; un­em­ploy­ment re­mains low

The Washington Post - - ECONOMY & BUSINESS - BY DANIELLE PA­QUE­TTE Heather Long con­trib­uted to this re­port.

The U.S. econ­omy added 155,000 jobs in Novem­ber, miss­ing ex­pec­ta­tions for more ro­bust growth, and the un­em­ploy­ment rate stayed at a 49-year low of 3.7 per­cent, fed­eral economists re­ported Fri­day.

But hir­ing has re­mained strong over­all as 2018 wraps up. Amer­i­can em­ploy­ers have added more than 200,000 jobs in four of the past six months, even in the face of eco­nomic curve­balls such as trade ten­sions, jit­tery mar­kets and hur­ri­canes.

Con­struc­tion saw a steep slow­down in Novem­ber, said Martha Gim­bel, re­search di­rec­tor for the Hir­ing Lab at In­deed, an em­ploy­ment web­site. Growth dropped from 24,000 jobs in Oc­to­ber to last month’s 5,000.

One sec­tor’s volatil­ity shouldn’t cast a shadow over the promis­ing broader trends, she said.

“155,000 is not the num­ber peo­ple were dream­ing about,” Gim­bel said, “but it’s a per­fectly solid num­ber.”

An­a­lysts pre­dict that pay­roll growth in 2018 is still on track to beat the pre­vi­ous year’s av­er­age monthly gains of 182,000 po­si­tions and could sur­pass 2016’s av­er­age monthly in­crease of 195,000.

“Most mea­sures of the U.S. econ­omy have been hold­ing up quite nicely,” said Mark Ham­rick, se­nior eco­nomic an­a­lyst at Bankrate, a per­sonal-fi­nance web­site. “The ques­tion is: How much slow­ing is there on the hori­zon?”

Some economists worry that 2018’s growth pace isn’t sus­tain­able next year with such a tight la­bor mar­ket. The un­em­ploy­ment rate reached 3.7 per­cent in Septem­ber and has since held at that level.

Em­ploy­ers com­plain that a tal­ent short­age is thwart­ing their growth plans, assert­ing that it is in­creas­ingly dif­fi­cult to find peo­ple with the right skills.

That’s good news for em­ploy- ees, though. Height­ened com­pe­ti­tion seems to be driv­ing up wages af­ter years of lag­ging since the Great Re­ces­sion.

The La­bor Depart­ment’s Oc­to­ber jobs re­port showed that the typ­i­cal worker’s earn­ings had grown by 3.1 per­cent in the past year — the big­gest jump since 2009. Wage growth stuck to that rate in Novem­ber. Some of that in­crease, how­ever, is be­ing eaten up by in­fla­tion, which has also ticked up this year.

Health care, pro­fes­sional ser­vices, and trans­porta­tion and ware­hous­ing — work tied to on­line shop­ping — have led the re­cent hir­ing spree, and man­u­fac­tur­ing has seen un­usu­ally high lev­els of growth, with an in­crease of 288,000 jobs over the past year.

Pro­duc­tion jobs in durable goods — wash­ing ma­chines, re­frig­er­a­tors, mi­crowaves, air con­di­tion­ers — has fu­eled much of that up­swing, ac­cord­ing to the Bureau of La­bor Statis­tics (BLS), suggest­ing peo­ple have more money to spend on big-ticket items.

“We’re in a re­ally good spot if you ask me,” Larry Kud­low, the pres­i­dent’s top eco­nomic ad­viser, said on CNBC af­ter the jobs re­port sur­faced. “We’re get­ting tremen­dous in­creases in growth.”

The smaller-than-ex­pected gains in Novem­ber shouldn’t trig­ger con­cern, Jamie Di­mon, chief ex­ec­u­tive of JPMor­gan Chase, said in a Fri­day call with re­porters.

“That may just be a bump in the road,” he said.

Still, some economists cau­tion that not ev­ery worker is reap­ing the ben­e­fits. La­bor lead­ers say wage growth among ser­vice work­ers is lack­ing. Some blame de­clin­ing union mem­ber­ship and the rise of sub­con­trac­tors, which have cramped pay and ac­cess to paid time off and health in­sur­ance.

Ser­vice work­ers “don’t have the lever­age to take ad­van­tage of tight la­bor mar­kets,” said AFL-CIO chief economist Bill Spriggs.

Em­ploy­ment in the pri­vate sec­tor looked gen­er­ally healthy in Novem­ber, pay­rolls pro­ces­sor ADP re­ported Thurs­day, with em­ploy­ers record­ing 179,000 new po­si­tions. (Oc­to­ber’s ADP count was re­vised down to 225,000 from 227,000.)

The over­all num­ber was a fall from the 237,000 new po­si­tions added in Oc­to­ber, per the lat­est BLS fig­ures, which largely made up for jobs lost dur­ing Hur­ri­cane Florence’s bru­tal Septem­ber run through the Caroli­nas.

Pres­i­dent Trump cel­e­brated the re­cov­ery, telling re­porters last month, “That was shock­ing for a num­ber of peo­ple, and that was a tremen­dous num­ber by any stan­dard.”

The trade war with Bei­jing, how­ever, con­tin­ues to rat­tle in­vestors.

Though Trump and Chi­nese Pres­i­dent Xi Jin­ping ap­peared to reach a tem­po­rary truce dur­ing their din­ner in Ar­gentina last week­end — Trump agreed to hold off on a tar­iff in­crease sched­uled to take ef­fect Jan. 1 — re­ports Wed­nes­day that a prom­i­nent Chi­nese ex­ec­u­tive had been ar­rested in Canada at the United States’ re­quest have damp­ened op­ti­mism around ne­go­ti­a­tions.

“Trade ten­sions are start­ing to eat at busi­ness con­fi­dence,” said Lind­sey Piegza, chief economist at the fi­nan­cial-ser­vices com­pany Stifel. “We’ve seen a pull­back in terms of in­vest­ment. Busi­nesses are start­ing to ques­tion whether they do want to take on that ad­di­tional hire.”

Mean­while, Trump’s tar­iffs have not shrunk the U.S. trade deficit. That gap hit $55.5 bil­lion in Oc­to­ber, a 10-year high, new Com­merce Depart­ment data showed Thurs­day. Plung­ing soy­bean ex­ports to China played a role — sales of the crop over­all fell by $800 mil­lion.

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