Another sign of a wobbly economy in weaker November jobs report

Americans got another positive jobs report on Friday -- but it was full of warning signs that the economy is...

Posted: Dec 7, 2018 8:02 PM
Updated: Dec 7, 2018 8:02 PM

Americans got another positive jobs report on Friday -- but it was full of warning signs that the economy is beginning to stutter.

The US economy added 155,000 jobs in November, the Labor Department reported Friday. That's fewer than expected, but the unemployment rate remained steady at 3.7%.

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October's jobs numbers were also revised down slightly, to put the monthly average over the past year at about 204,000 jobs, and the average over the last quarter at 170,000.

The report is a sign of a slowing but still strong labor market — and further support for the idea that the Federal Reserve may hold off hiking interest rates over the next year as quickly or as much as initially planned.

That's reassuring to investors who had been worried that the Fed would move too fast to cool off an already decelerating economy.

"My reaction is a sigh of relief," said Leo Grohowski, chief Investment Officer at BNY Mellon Wealth Management. "I think a mild miss is more than acceptable in order to help the Fed understand that multiple rate increases may not be warranted for 2019."

Markets have been in turmoil in recent weeks amid continued uncertainty about Trump's ability to end his trade war with China, as well as over his ability to sell Congress on his replacement for the North American Free Trade Agreement. The President last weekend threatened to terminate the 1994 deal, which would create a six-month window for Congress to ratify the new deal, known as the US-Mexico-Canada Agreement, or risk having no deal at all.

Most economists have been projecting a slowdown in 2019 as the effects of tax cuts and government spending wear off, turning into a recession sometime in 2020. The current expansion is only seven months away from being the longest period of positive job growth since the 1850s.

The missing ingredient, however, has been wage growth — and that looks like it's beginning to change. Paychecks grew by 3.1% over the last year, a relatively robust number that is in line with expectations as employers have had to fight to attract workers in recent months.

The percentage of people participating in the labor force remained the same and the median number of weeks people remained unemployed dropped from 9.4 to 8.9 weeks in November, suggesting that people are getting jobs more quickly after losing them.

However, the number of people "marginally attached" to the labor force — those who had looked for a job in the past year but stopped in the past month because they couldn't find one — has risen by nearly 200,000 over the past year. The percentage of people working part time who would rather work full time also rose slightly.

Despite high demand for workers in some sectors, that may show that people who want jobs increasingly aren't in the places where employers need them — and that the economy still has room to expand before running out of workers entirely. Also, the number of people holding part-time jobs in addition to their full-time jobs has been rising, and is now above its pre-recession high.

The retail sector, which is readying for a very busy holiday season, saw surprisingly anemic employment growth. New jobs in general merchandise stores were offset by losses in clothing, electronics, and sporting goods stores.

The strongest job growth came in health care, transportation and warehousing, and manufacturing, which added another 27,000 jobs for 288,000 total growth over the past year. Tariffs and fears of a larger trade war may not be having a huge positive impact, but they're definitely not choking the sector either.

"I think the narrative has turned quite negative on the economy, part of that driven by trade and tariffs," Grohowski said. "And we're not hearing that from the CEOs and CFOs we're talking to."

Indiana Coronavirus Cases

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Cases: 751242

Reported Deaths: 13795
CountyCasesDeaths
Marion1032931788
Lake556911009
Allen41692692
St. Joseph36990565
Hamilton36588417
Elkhart29398461
Tippecanoe22901226
Vanderburgh22556400
Porter19356325
Johnson18471389
Hendricks17682317
Clark13226195
Madison13149344
Vigo12614253
LaPorte12419221
Monroe12207176
Delaware10966198
Howard10321225
Kosciusko9630121
Hancock8576146
Bartholomew8169157
Warrick7860156
Floyd7811180
Grant7242179
Wayne7162201
Boone6966103
Morgan6761141
Dubois6218118
Marshall6209116
Cass6016110
Henry5900110
Dearborn589878
Noble581488
Jackson509076
Shelby501496
Lawrence4742122
Gibson444894
Clinton442355
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DeKalb439885
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Whitley406543
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Steuben400159
Miami395269
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Jefferson335886
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Fayette284864
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Scott270156
Clay267148
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Starke228058
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Sullivan214643
Owen211858
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Jay200932
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Martin91715
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Ohio57911
Unassigned0420

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1108902

Reported Deaths: 20166
CountyCasesDeaths
Franklin1287491467
Cuyahoga1158082211
Hamilton814091250
Montgomery525571043
Summit484351001
Lucas43359820
Butler39018606
Stark33338929
Lorain25675505
Warren24595303
Mahoning22376603
Lake21211388
Clermont20124253
Delaware18856136
Licking16663222
Fairfield16576204
Trumbull16551482
Medina15612271
Greene15284248
Clark14237306
Wood13292200
Portage13251215
Allen11914239
Richland11607211
Miami10849225
Wayne9146223
Columbiana9034230
Muskingum8906135
Pickaway8664122
Tuscarawas8650250
Marion8642138
Erie8056165
Ashtabula7161179
Hancock6999132
Ross6945161
Geauga6838151
Scioto6534106
Belmont6157174
Union584649
Lawrence5732102
Jefferson5679158
Huron5546122
Sandusky5442126
Darke5420129
Seneca5350128
Washington5320109
Athens523960
Auglaize502187
Mercer487385
Shelby476895
Knox4572112
Madison444366
Ashland435797
Putnam4336103
Defiance432399
Fulton432174
Crawford4040110
Brown402461
Logan387677
Preble3856105
Clinton379166
Ottawa373681
Highland359865
Williams348278
Champaign344859
Guernsey324953
Jackson318254
Perry297350
Morrow291840
Fayette285450
Hardin275365
Henry273467
Holmes2702101
Coshocton269060
Van Wert247264
Adams243256
Pike242835
Gallia240750
Wyandot234556
Hocking220563
Carroll197348
Paulding176542
Meigs148440
Monroe136344
Noble136239
Harrison114138
Morgan109624
Vinton85717
Unassigned03
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