Strong November Jobs Report Counters Anxieties Over Weakening Economy

Strong November Jobs Report Counters Anxieties Over Weakening Economy
By: WNG NYT Posted On: December 06, 2019 View: 35

Strong November Jobs Report Counters Anxieties Over Weakening Economy

■ 266,000 jobs were added in November. Analysts had expected a gain of about 180,000, according to MarketWatch.

■ The unemployment rate was 3.5 percent, down from the previous month.

■ Average hourly earnings rose 0.2 percent, with a year-over-year gain of 3.1 percent.

The return of tens of thousands of striking workers to their jobs at General Motors helped supercharge hiring totals last month.

The reassuring jobs report, released Friday morning by the Labor Department, offered a counterpoint to renewed anxieties about an escalating trade war and a weakening global economy.

“I think that this report is a real blockbuster; payrolls smashed expectations,” said Daniel Zhao, senior economist at the career site Glassdoor.

Another 41,000 jobs were added to September and October’s employment totals after revisions. A broader measure of unemployment, which includes part-timers who would prefer full-time jobs and people who are too discouraged to look for work, inched down to 6.9 percent.

Stocks rose following the report, with the S&P 500 up by more the 0.7 percent in early trading.

The health of the manufacturing sector has been somewhat clouded by the 40-day G.M. strike this fall and disruption in the aerospace industry stemming from the crash of two Boeing airplanes. Friday’s report showed a gain of 54,000 jobs in that sector, reversing last month’s losses, but it did not signal a significant upturn.

“Manufacturing is still flat after you pull out the returning strike numbers,” Mr. Zhao said. “It’s still suffering from headwinds from the trade war, but at least it’s not worsening.”

Average monthly payroll gains for the past three months reached 205,000, a hefty number for the 11th year of an economic expansion.

Mr. Zhao noted that given the record-low jobless rate, wage growth over all remained stubbornly slow, and has decelerated this year.

The overall employment picture was impressive, said Diane Swonk, chief economist for the accounting firm Grant Thornton, but manufacturing was lagging compared to a strong service sector.

“We’re getting a lot of the gains in leisure, hospitality and health care,” she said, adding that the additions in professional services indicated more hiring of college graduates, which had softened slightly over the summer.

In a newsletter this week, David Kelly, chief global strategist at JPMorgan Funds, compared recent hiring to squeezing one more glob of toothpaste out of a seemingly empty tube. “Over the last few years,” he said, “an apparently fully tapped-out labor market has yielded a surprising number of new workers.”

The buffet of available job postings has drawn many Americans back to work. Employers have widened their scope, recruiting people with disabilities or criminal records. Older baby boomers are working past retirement age and stay-at-home parents are switching to paid employment.

The labor force participation rate inched up through most of the spring and fall, driven in part by an increase in women 25 to 34 getting jobs or starting to look for work. Over the last year, nearly 1.7 million people joined the ranks of workers.

Mr. Kelly does not expect the historically low unemployment rates to fall much more. “Gains in employment going forward will have to come from an increase in the labor force,” he wrote.

Economists are engaged in a vigorous debate about how tight the labor market is and how many more people are available to work. Mr. Trump’s more restrictive immigration policies have significantly shrunk the supply of foreigners who could come to work in the United States.

Employment agencies say they are often unable to find candidates to fill the jobs that are open. “At every level of employment, it’s been super tight,” said Yvonne Rockwell, owner of an Express Employment Professionals agency in Santa Clarita, Calif. “I truly believe that anybody who wants to work is working.”

Southern California has a lot of aerospace companies, and Ms. Rockwell focuses on skilled trades and higher-level positions. “This is our best year ever,” said Ms. Rockwell, who opened her franchise five years ago.

The competition for workers has helped push up wages, particularly at the lower end of the scale.

And Amazon’s decision last year to raise its minimum wage to $15 across the country has turned up the pressure in some places.

“Everyone is struggling now to keep up with Amazon,” said John Dickey, who owns two Express Employment agencies in Massachusetts.

One company he works with, a light manufacturer in the chemical and food industry, is looking to hire 30 people for jobs that pay $14 to $15 an hour. “This company does drug tests and background tests, and it requires 12 hours on your feet,” he said. “And you need to be able to speak and communicate in English.”

Employers routinely complain about their inability to find reliable workers, but Mr. Dickey acknowledged that many of the available jobs could be less than desirable.

“These can be pretty rough working conditions,” he said, pointing to the food industry, where people can spend a lot of time in refrigerated warehouses or near industrial ovens. “It’s cold, it’s hot, it’s wet, the floors are slippery, so there tends to be a fair amount of turnover,” he said.

The clamor for more workers may make it easier for people who want to turn temporary holiday jobs into permanent ones. Historically, about 4 percent to 7 percent of seasonal workers are hired, said Amy Glaser, senior vice president of the staffing firm Adecco. This year, she expects that 20 percent could be retained after the new year.

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Credit...Scott Olson/Getty Images

Despite the low unemployment rate, stable, secure jobs that pay a middle-income wage can be hard to find across a range of skills.

Alan Kirshner worked as a budget analyst at Bristol Myers Squibb in New Jersey for 18 years before a restructuring eliminated his job in 2015.

“My goal was to find something more permanent like I had in the past,” he said, “but those opportunities were much more limited.” Companies have used technology to reduce staffing, shifted full-time workers to contracts and often moved the better-paying jobs out of the country or to lower-cost areas in the United States.

Mr. Kirschner is now a career coach — a business that he controls, but that offers no steady income or benefits.

Researchers have often documented bias against workers over 50 and minorities, especially African-American women.

The job market can differ radically from one place to another, with a 1.6 percent jobless rate in Fargo, N.D., 4.2 percent in Binghamton, N.Y., and 6.1 percent in Bakersfield, Calif.

Large urban centers tend to gulp much of the gains, said Julia Pollak, a labor economist at the online employment company ZipRecruiter.

Holiday hiring plunged among traditional retailers, according to ZipRecruiter’s listings, with rural and suburban areas hit particularly hard. And a much larger share of temporary holiday job postings are in e-commerce compared to in stores, she said.

President Trump stoked trade tensions this week by imposing new tariffs on steel and aluminum from Brazil and Argentina, suggesting that the feud with China could continue for another year and threatening European allies with import taxes.

The White House’s unpredictable trade policy has unsettled businesses and cramped investment. They have also helped heighten concerns about a faltering manufacturing sector.

“When you look globally, there are some tentative signs that the global manufacturing slowdown is bottoming out,” Michael Gapen, chief United States economist for Barclays, said. “But it may take the U.S. manufacturing sector a little longer than the rest of the world to stabilize.”

“We still don’t have a Phase 1 agreement,” he said, referring to the promised first edition of a comprehensive trade accord with China. “And private sector spending in the U.S. is moderate at best.”

A trade agreement with China would, of course, be welcome, but Mr. Gapen said that at this point, he did not expect that it would help lift growth. “It’s more of a going back to the beginning,” he said, noting that in the end, China is likely to commit to agricultural purchases that it might have made earlier without tariffs.

The government will revise its November estimates two more times, and its October estimate once more.

“We have seen some moderation in jobs gains, which you would expect,” said Rubeela Farooqi, chief United States economist at High Frequency Economics. But the average monthly increases to date, the low jobless rate and the growing share of adults joining the work force all point to a strong foundation, she said. “I think the labor market over all is looking pretty healthy.”

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