US hiring slower but steady as employers add 155K jobs
WASHINGTON (AP) — U.S. businesses added a smaller but still-healthy number of jobs last month, while the unemployment rate remained at a five-decade low and wages rose at a solid clip.
The figures, released Friday by the Labor Department, point to an economy that is still adding jobs at a steady rate after nearly 10 years of recovery. So far, employers are mostly shrugging off the financial market turmoil of the past two months and rising trade tensions between the U.S. and China.
U.S. employers added 155,000 jobs in November, down from a more robust 237,000 in October. The unemployment rate remained 3.7%, nearly a five-decade low, for the third straight month. Average hourly pay rose 3.1% from a year ago, matching the previous month's figure, which was the best since 2009.
The economy is expanding robustly, with growth reaching 3.9 percent at an annual rate over the summer and fall, the best six-month pace in four years. Still, ongoing interest rate hikes by the Federal Reserve, the Trump administration's threats of higher tariffs on China, and weakening global growth have roiled financial markets and raised fears about the U.S. economy's future.
Investors initially bid up stocks after the report's release, but financial markets fell in mid-day trading. The Dow Jones dropped 375 points, or 1.5 percent. That followed a small decline Thursday and an 800 point drop Tuesday.
November's jobs figure could portend a slower expansion next year, economists said, as the stimulus from last year's tax cuts wears off and higher borrowing costs weigh on home sales and business investment. But most analysts anticipate the economy will still grow.
"The economy continues to churn out new jobs and reflects the strong underlying business conditions that point to steady, albeit slower job growth and economic activity in 2019," said Joe Brusuelas, chief economist at consulting firm RSM. "This report strongly implies that a recession is not looming just over the horizon."
The report is unlikely to dissuade the Federal Reserve from raising short-term interest rates at its meeting later this month, as expected, Brusuelas said. But it suggests the Fed may not hike rates next year as rapidly as many investors have feared.
The ongoing job gains are pushing down unemployment rates to historically low levels for a variety of groups. The unemployment rate for men aged 20 and above fell last month to 3.3%, the lowest in 18 years. And the rate for Americans with just high school diplomas dropped to 3.5%, the lowest since December 2000. The African-American jobless rate declined to 5.9%, matching May's figure as the lowest on record.
It's also become more challenging for businesses to find the workers they need. Employers have posted 7 million open jobs, outnumbering the ranks of the unemployed, which fell last month to just under 6 million.
Michael Mabry, chief operating officer at Mooyah, a fast-causal burger chain mostly located the south, says his company has had to raise pay and offer more flexible scheduling to attract new workers. The company plans to open 15 locations next year, which could create up to 450 new jobs.
Applications have fallen "to an all-time low," Mabry said. The company focuses most of its efforts on recruiting employees from other restaurants, including those that might work later hours at places that serve alcohol. His restaurants close at 10 p.m.
"We've had to get competitive on work-life balance," Mabry said. Nearly all employees make at least $10 an hour, and management salaries have risen 5 to 10 percent in the past year, he added.
Hiring in November was led by health care firms, which added 40,100 jobs, and professional services such as accounting and engineering, which gained 32,000. Manufacturing companies hired 27,000 new workers, the most in seven months and a sign that trade tensions have yet to weaken factory hiring.
Lydia Boussour, senior economist at Oxford Economics, said that continuous job gains and rising pay has bolstered consumer confidence, offsetting the impact of falling stock prices. Greater confidence has boosted holiday shopping.
Retailers responded by adding 18,200 positions in November, the most in six months. Online spending has lifted shipping and warehousing jobs, which grew 25,400, the largest in 14 months.
Most recent data have pointed to an economy in solid shape. Americans increased their spending in October by the most in seven months, and their incomes grew by the most in nine months, according to a government report last week. Consumer confidence remains near 18-year highs, surveys show. And both manufacturing and services companies expanded at a healthy pace in November, according to a pair of business surveys.
The housing market, though, has stumbled this year as the Fed's rate hikes have contributed to sharply higher mortgage rates. Sales of existing homes have fallen 5.4% from a year earlier, the biggest annual decline in more than four years.