U.S. job growth slowed sharply last month, and many workers' incomes fell as automakers, airlines and retailers trimmed their payrolls just as the holiday season was beginning, the Labor Department reported today.
Employers added 112,000 jobs in November, about a third as many as they did the previous month, and below the roughly 150,000 per month that economists believe is needed to keep up with population growth. The department also shaved 54,000 jobs off its earlier estimates of October and September gains to nonfarm payrolls.
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The unemployment rate slipped to 5.4 percent from 5.5 percent and has been at either of those two levels every month since July.
Worker's hours also fell, which pushed down average weekly wages by $1.25 to $533.47 for most workers on private payrolls.
The earnings figures help "explain the weak start to holiday retail sales," Stuart G. Hoffman, chief economist at PNC Financial Services Group, wrote in an analysis.
The labor report came a day after the nation's major retail chains reported disappointing results for November. Sales at stores open for more than a year rose just 1.7 percent last month, compared with a 3.7 percent gain in 2003, according to the International Council of Shopping Centers. Several companies reported falling sales, including Gap Inc., Federated Department Stores, which owns Bloomingdale's and Macy's, and May Department Stores, which owns Hecht's, Lord & Taylor and Filene's.
Several big chains have announced they will use deeper discounts and bigger promotions to try to win the business of the lower-income shoppers that have been hardest hit by recent increases in food and energy prices.
"The recent job picture indicates that the holiday shopping season will be a decent, not spectacular one," wrote Sung Won Sohn, chief economic officer for Wells Fargo Economics.
Stock prices were little changed at midday.
The job numbers did not change widespread expectations that the Federal Reserve will raise short-term interest rates for a fifth time this year when policymakers meet Dec. 14, and continue moving it up gradually in the year ahead to keep inflation contained.
The November job gain was the smallest since July, and it contrasted sharply with an October burst of hiring that partly reflected the effects of the four hurricanes that struck the southeast section of the country in August and September.
Construction and temporary jobs surged in October, as companies across the country provided labor and materials for the clean-up and reconstruction efforts. Both job categories rose by much less in November. All the figures are adjusted for seasonal variation.
Total U.S. job gains have averaged 178,000 a month since September, but some economists expect that rate to fall in coming months as the boost from the hurricanes fades and as economic growth cools slightly.
"The bottom line is payroll job growth is anemic," said Richard Yamarone, director of economic research at Argus Research Corp. "Economic growth is moderating and businesses don't need to pick up the pace of hiring."
Hiring was slower across many industries, but some of the best job growth was reported in the leisure and hospitality, education and health areas.
However, those gains were partly offset by job losses in other areas.
Manufacturing shed 5,000 jobs, for its third consecutive monthly decline. Within this category are the automakers, which have cut production to reduce bloated inventories.
Retailing lost 16,000 jobs, with cuts reported at gasoline stations, department stores and stores selling clothing, sporting goods, books and music. The fall reflected several factors, analysts said. First, retailers added fewer holiday workers as they sensed weakening demand from middle- and lower-income households, whose wages have not kept up with inflation.
But additionally, retailers, like other businesses, are working to hold down labor costs to protect their profit margins at a time when consumers are resisting price increases, analysts said. They are striving to boost productivity, or output per labor hour, through the use of new technologies and more efficient business processes.
The growth in online shopping also has shifted an increasing amount of buying out of the stores, reducing the need for extra holiday retail workers.
Indeed, retailers have cut jobs every November since 2001, the year of the last recession.
The unemployment rate was little changed among racial and ethnic groups. White joblessness has been 4.7 percent for four consecutive months. The Hispanic or Latino rate was unchanged in November at 6.7 percent. Black unemployment rose to 10.8 percent last month from 10.7 percent the prior month.
