U.S. Hiring Slows as Wages Grow, Unemployment Holds at Multidecade Low
U.S. employers slowed their pace of hiring in November, but wage growth matched the highest rate in nearly a decade and unemployment held at a very low level, showing the labor market remains a pillar of strength even as the stock market and other economic signals flash caution.
U.S. nonfarm payrolls increased a seasonally adjusted 155,000 in November, the Labor Department said Friday. The unemployment rate held steady at 3.7% last month, matching lowest rate since December 1969. Year-over-year wage growth matched the prior month’s 3.1% pace as the best rate since 2009.
Economists surveyed by the Wall Street Journal had expected 198,000 new jobs in November and a 3.7% unemployment rate.
Revised figures show employers added 237,000 jobs in October and 119,000 jobs in September, a net downward revision of 12,000. Some economists said October’s robust job growth in part reflected a payback from a softer September, when Hurricane Florence may have delayed some hiring.
So far this year, employers have added an average of 206,000 jobs a month, running ahead of last year’s pace of 182,000 per month, despite a tighter labor market. More broadly, U.S. payrolls have grown for 98 straight months, by far the longest stretch of steady hiring on record.
In November, the pace of hiring increased in the retail, transportation and warehousing and manufacturing sectors, but payrolls rose more slowly in construction, leisure and hospitality and businesses services. Payrolls at all levels of government fell by 6,000 last month.
Somewhat weaker overall hiring last month comes against a backdrop of mixed signals for the U.S. economy. Equity markets are well down from early October, bond yields have fallen in recent weeks, business are showing caution in making big-ticket investments and concerns over global growth are mounting. But the driver of the U.S. economy–consumer spending–remains strong. And that’s likely supported by improved wages and low unemployment.
Average hourly earnings for all private-sector workers increased 6 cents last month to $27.35. It’s the second straight month hourly wages rose better than 3% from a year earlier. That had not previously occurred since the recession ended more than nine years ago. However, the average work week was slightly shorter, causing weekly wages to decline on the month.
The unemployment rate has held at or below 4% since April, creating a long stretch of historically low joblessness. That’s resulted in more job opportunities for those with lower levels of education and rising incomes at the bottom of the pay scale.
Take Darlene Lee, 32, who was released from jail in 2015 after serving time on drug-related charges. With a high school diploma and a checkered past, the only work she could find was as a housekeeper. But she pursued training as phlebotomist, and earlier this year Johns Hopkins Medicine hired her as a technician. The Baltimore-based health system targets those with criminal records for employment in order to meet the growing demand for medical staff.
Working 40 hours a week or more at $14 an hour, Ms. Lee was able to purchase a home in June for her two children.
“I feel there’s no limitation on what I can accomplish,” she said. “I’ve overcome a lot, and I want to build a better foundation for my children.”
A broader measure of unemployment, including those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time, rose to 7.6% from 7.4% the prior month. The rate, known as the U-6, has trended this year at the lowest level in 18 years. But it remains slightly above the rate recorded last time the headline unemployment rate stayed near 4%, suggesting there may still be some slack in corners of the labor market.
While unemployment is historically low, the labor-force participation rate is still only modestly above multidecade lows touched in 2015. Friday’s report showed a net 133,000 Americans entered the labor force in November. The share of American adults working or looking for work to held steady at 62.9%.
With just a small share Americans out of work but seeking jobs, and the labor force growing only slowly, some employers have had difficulty filling job openings. Separate Labor Department data showed the number of unfilled jobs reached a record high this summer.
A Federal Reserve report released Wednesday showed that in more than half of the central banks’ 12 districts, businesses reported labor shortages. In the Chicago region, a number of firms said they had been “ghosted” by employees, meaning workers stop arriving without notice and became impossible to contact.
Friday’s report likely keeps the Fed on track to raise short-term interest rates for a fourth time this year, when officials meet later this month. But after that, Fed officials are likely to keep a careful eye on economic data, including hiring and inflation, which appears to be cooling, when determining the pace of rate increases in 2019.
Source: Dow Jones