NEW YORK (CNNfn) -- Investors braced for a wild ride on Wall Street Friday after the Labor Department reported that non-farm U.S. payrolls grew by just 118,000 in November, the jobless rate climbed to a four-month high of 5.4 percent, and the Commerce Department reported a sharper-than-expected 0.9 increase in factory orders.
The number of jobs created last month was well below the 224,000 new jobs reported in October and the 179,000 economists had forecast for the month. Unemployment for the nation grew from 5.2 percent in October.
The result of the jobs report suggested to many analysts that the nation's economy is slowing to a more typical pace. Even so, many were alarmed by a 9 cent rise in average hourly wages, potentially an indication that inflation could be looming near.
Financial markets across Asia and Europe tumbled on Friday ahead of the jobs report. Their confidence was undermined late Thursday when U.S. Federal Reserve Chairman Alan Greenspan stated publicly that central bankers should be leery about "irrational exuberance" in stock markets. His comment suggested that Wall Street's 25 percent surge this year has been disproportionate and raised concerns that the Fed will need to raise interest rates.
"It's clear he wanted to make a point," said Paul Boltz, chief economist at T. Rowe Price. "He's concerned the market has run too far."
Liam Dalton, president of Axion Capital Management, said that Wall Street stocks could mirror the rest of the financial world's performance for the day. While cautious about predicting an extended correction, he suggested that the Dow Jones industrial average could lose 300 to 600 points over the next two weeks.
"I think stock have easily 5 to 7 percent risk here," he said. "Whether it becomes a major decline, I'm not sure."
Market watchers anticipated a sharp reaction to Friday's jobs report, particularly because Greenspan's comments triggered so many concerns from investors around the world. However, the report itself was fairly benign, even pleasing to many who feared the economy would not slow down enough to assuage the Fed.
Along with the rise in hourly wages and a gain in worker productivity, the report said jobs in construction and manufacturing grew at a moderate pace. Service jobs posted the most significant gains, adding 96,000 jobs to the non-farm payrolls. Job growth in those sectors was countered by job cuts in government.
Meanwhile, factory orders climbed higher than had been expected in October despite the slowdown in the automotive industry, the Commerce Department reported Friday.
Total new orders rose 0.9 percent to a seasonally adjusted $321.3 billion, a much sharper increase than the 0.2 percent gain Wall Street economists had forecast.
The Commerce Department said that, excluding transportation, factory orders surged 2.3 percent in October -- the biggest rise in six months since a 2.6 percent increase in April.