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.
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 employees, 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.
Heather Long contributed to this report.