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Washington, United States | AFP | Job creation slowed unexpectedly in the United States last month as the service sector added fewer workers, but the unemployment rate held steady at a 49-year low, the government reported Friday.
The new numbers fell below recent trends and avoided another blow-out result, denying President Donald Trump a dose of rosy news as fears mount that growth in the world’s largest economy has peaked.
Hiring fell to 155,000 net new positions in November while the gain in October was revised down to 237,000, the Labor Department reported.
But the jobless rate held steady at 3.7 percent for the third consecutive month and hourly wages continued to outpace inflation.
The November result was substantially weaker than the 189,000 new jobs economists had been expecting to see and also fell short of average gains recorded over the last year.
Worries that the current pace of economic growth may not be sustainable has rattled markets in recent weeks.
The Federal Reserve has offered some relief by signaling it will consider slowing the pace of interest rates next year — but November’s strong wage gains and low unemployment could add to the case for continuing to tighten monetary policy.
Still, investors greeted the news warmly before Friday’s markets open, with stocks and gold futures rising following the report.
Average hourly earnings rose 3.1 percent over November of 2017, matching the pace recorded in October, which had been the strongest increase in nearly a decade. Consumer inflation rose 2.5 percent in that period.
But hiring fell in the auto industry, a sector in which major US manufacturers are now increasing layoffs, as well as in hospitality and leisure, along with professional and information services.
Hiring at the federal and local government levels also slowed for the second month in a row.
Ahead of the crucial holiday season, hiring by major retailers reversed some of the declines of recent months, adding 18,000 new positions — but this was partially offset by losses in stores selling clothing and electronics and outlets for sporting goods and books.
“All these components are very noisy month-to-month and we see no sign of softening trends,” Ian Shepherdson of Pantheon Macroeconomics wrote in a client note.
At the current rate, unemployment is likely to continue to fall, reaching as little as three percent by the end of next year, he said.
“No one at the Fed thinks that’s sustainable.”
