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The U.S. economy gained just 155,000 jobs during the month of November, according to data released Friday by the Bureau of Labor Statistics. Economists had predicted a gain of 198,000, compared with October’s robust 237,000.
November's report showed the unemployment rate unchanged, at 3.7 percent, the lowest in almost 50 years, and wage growth ticked up to 3.1 percent — partly due to an increase in minimum wage by retail giant Amazon — matching the heady gain in October, which saw wage gains spike at the fastest pace since 2009.
"Today’s lower-than-expected job numbers may appear particularly disappointing after such a strong month in October," said Steve Rick, chief economist at CUNA Mutual Group. "However, it’s hard to expect the economy to sustain over 200,000 jobs each month while maintaining such a low unemployment rate, especially given the impact of wildfires and the continuation of tariffs and trade policy changes."
The latest snapshot of the economy comes amid a turbulent week on Wall Street, where mounting political tension with China, concerns about a global economic slowdown, and fears of a U.S. recession led to a massive sell-off.
The Dow Jones Industrial Average plunged by around 800 points twice in the past two trading days (Tuesday and Thursday, with markets closed on Wednesday in honor of funeral services for former President George H.W. Bush), after a 500-point upward swing on Monday.
Dow futures trended upward on Friday morning in pre-market trading as the weaker-than-expected jobs number eased fears that the Federal Reserve would aggressively hike interest rates against the backdrop of a historically tight labor market with rising wages.
"Investors clearly want the Fed to cool it with rate hikes amid concerns about trade and tariffs, risks for global growth and the slowdown in the housing market," said Mark Hamrick, senior economic analyst at Bankrate.
“Our economy is currently performing very well overall, with strong job creation and gradually rising wages," said Federal Reserve Chairman Jerome Powell on Thursday. “In fact, by many national-level measures, our labor market is very strong."
The Fed is widely expected to raise interest rates at its next two-day monetary policy meeting, on Dec. 18-19. That hike would be the fourth this year, and the fourth for the Trump-nominated Powell. Market watchers are expecting a more measured trajectory of interest rate increases for 2019.
"The U.S. economy is facing headwinds as the year winds down," said Hamrick. "Slowing global growth, surging U.S. interest rates and uncertainty surrounding U.S. trade are among the downside risks. Still, as it now stands, U.S. growth in 2018 is on track for an annual gain of nearly 3 percent. Is this as good as it gets? Stay tuned."