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US Jobs Data to Give Economic Clues 12/06 06:15
Friday's November jobs report will provide insight into whether steady
hiring remains a source of strength for the U.S. economy even as the Trump
administration's trade conflicts have heightened uncertainties for employers.
WASHINGTON (AP) -- Friday's November jobs report will provide insight into
whether steady hiring remains a source of strength for the U.S. economy even as
the Trump administration's trade conflicts have heightened uncertainties for
employers.
Economists have forecast that the government will report that employers
remained confident enough to add a solid 187,000 jobs, according to data
provider FactSet. The unemployment rate is expected to remain 3.6%, near a
half-century low.
Steady job growth tends to reassure consumers that the economy is expanding
and that their jobs and incomes remain secure, which, in turn, typically helps
fuel spending. Consumer spending has become an even more important driver of
growth because the Trump trade conflicts have reduced exports and led many
businesses to cut spending.
Renewed concerns that trade will continue to hamper the U.S. economy drove
stock prices lower earlier this week, after President Donald Trump said he was
willing to wait until after the 2020 elections to strike a preliminary trade
agreement with China. With the two sides still haggling, the administration is
set to impose 15% tariffs on an additional $160 billion of Chinese imports
beginning Dec. 15.
Both sides have since suggested that the negotiations are making progress,
but there is still no sign of a resolution.
Hiring in the United States has remained mostly healthy this year despite
the trade war. Even so, Trump's combative use of import taxes, combined with
retaliatory tariffs by China and Europe, has stalled job growth in
manufacturing.
Employers have added 176,000 jobs, on average, in the past three months.
That's enough to absorb new job seekers as a result of population growth and to
potentially lower the unemployment rate. Still, the monthly average job growth
is down from an average of 223,000 last year.
Some temporary factors could distort November's jobs data. An autoworkers'
strike at General Motors that ended in October artificially lowered that
month's job gain by about 41,000 to 128,000. Likewise, the return of those
employees to work should increase November's job gain by roughly the same
amount.
Many economists also expect that unseasonably cold weather in November might
have slowed hiring in weather-sensitive industries, principally construction
and restaurants and hotels.
And the holiday shopping season has begun later this year compared with
previous years, a fact that some economists think might have delayed hiring by
retailers and shipping firms last month.
With tariffs hobbling manufacturing, the jobs report will also likely
underscore a bifurcation of the job market: Service industries --- finance,
engineering, health care and the like --- are hiring at a solid pace, while
manufacturers, miners and builders are posting weak numbers.
Joe Brusuelas, chief economist at RSM, a tax advisory and consulting firm,
notes that services companies have added 1.4 million jobs this year, compared
with just 2,000 for manufacturing.
Despite the raging trade tensions, most analysts say they remain hopeful
about the economy and the job market. The economy grew at a 2.1% annual rate in
the July-September quarter, and the annual pace is thought to be slowing to
roughly 1.5% to 2% in the final three months of the year --- sluggish but far
from recessionary.
Consumer confidence has slipped in recent months but remains at a decent
level, helping boost sales of expensive purchases, such as autos and appliances.
With inflation surprisingly low, the Federal Reserve has cut its benchmark
short-term interest rate three times this year. Those rate cuts have helped
support the housing market. Sales of existing homes have risen nearly 5% in the
past year. Sales of new homes have soared by one-third.
(KR)
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