Jobs stronger than expected
November jobs growth slows but edges higher than estimates; unemployment remains unchanged.
NEW YORK (CNNMoney.com) -- Employers added fewer workers to U.S. payrolls in November but still came in a bit stronger than Wall Street's expectations, according to a closely-watched government reading on labor market strength released Friday.
The net gain in payrolls came in at 94,000 in November, after a revised 170,000 gain in October. Economists surveyed by Briefing.com had forecast a 70,000 increase in workers in the latest reading.
The September reading was revised lower by 52,000 jobs, while the October reading was raised up by 4,000. When the two revisions are taken into account, the number of workers with jobs is about 24,000 less than what was forecast for November, rather than 24,000 better, as suggested by looking at just the latest month.
The unemployment rate stayed at 4.7 percent reported for October. Economists had been forecasting a rise to 4.8 percent.
John Silvia, chief economist for Wachovia, said that despite the unchanged unemployment number, the report is consistent with slower economic growth.
"This is a good report in the sense we're not having a recession," he said. "But if you're looking for a strong economy or even [typical] economic growth, this is not it."
But Jeoff Hall, the chief U.S. economist for Thomson Financial, said he believes the report shows there is some underlying strength in the economy outside of the housing and credit markets.
"I have a glass-half-full view of this thing. This is another indicator that it's the financial turbulence that's the issue and that's quarantined right now," he said. "So I'm encouraged by these numbers."
The average hourly wages rose 8 cents, or 0.5 percent, to $17.63. It was the biggest one-month percentage gain since April 2006 and well above the forecast of a 0.3 percent rise, or the revised 0.1 percent increase, for October.
The increase left seasonally-adjusted wages up 3.8 percent over the last 12 months. That's a bit better than the 3.5 percent rise in retail prices for the 12 months ending in October, according to a separate Labor Department estimate.
The jobs report is being particularly closely watched this month, as there have been mixed signs about whether the U.S. economy is at risk of falling into recession next year. Concerns about recession have raised expectations that the Federal Reserve will cut interest rates for the third straight time at its meeting Tuesday.
But the slightly better than expected job growth, coupled with the jump in wages, could cause central bankers to limit themselves to a quarter-point cut, rather than the half-point that some investors and economists are looking for.
The job growth came from the service sector as manufacturing lost 11,000, while construction employment fell by 24,000, with 20,000 of that coming from residential construction. The problems in housing and mortgages did spread to some service sector categories, as banks, lenders and real estate firms lost more then 25,000 jobs between them.
Retail employment recorded a gain of 24,000 jobs, impressive because it needed to add a record number of jobs in order to post that gain after the seasonal adjustment that accounts for the surge in temporary workers brought on for holiday shopping. The raw number of new workers in the retail sector was a record 424,100, up narrowly from the previous record set a year ago.
General merchandise stores, which includes department stores and discounters, added 156,400 workers in the raw number before a seasonal adjustment, but that was the lowest level of seasonal hiring in four years. With the seasonal adjustment, that part of the retail sector posted an 11,200 job decline.