The U.S. labor market ended the year with lessmomentum, as payroll gains cooled by more than forecast and wages rose at the weakest annual pace since 2018, even as unemployment held at a half-century low of 3.5%.
Nonfarm payrolls rose 145,000 after a downwardly revised 256,000 advance the prior month, according to a Labor Department report Friday. That compares with the median estimate of 160,000 in Bloomberg’s survey of economists. Average hourly earnings climbed a below-forecast 2.9% from a year earlier, the first sub-3% reading since July 2018.
While the payrolls figure may be consistent with forecasts for gradual moderation, the wage numbers suggest that the labor market isn't as tight as the unemployment rate indicates. Federal Reserve policy makers are holding interest rates steady after three cuts in 2019 to insure against risks from trade-policy uncertainty and sluggish global growth, though further weakness could raise concerns about the durability of the record-long U.S. expansion.
Although job gains picked up steam in the second half, hiring in 2019 was the slowest since 2011, at 2.11 million. The strength of the labor market will also factor into Donald Trump's re-election chances in November, with the president repeatedly touting economic gains as a reason he deserves a second term.
Wages for production and nonsupervisory workers rose 3% in December from a year earlier, slowing sharply from the 3.6% pace in October and potentially throwing cold water on the idea that lower-level employees were seeing bigger gains.
Manufacturers cut payrolls by 12,000 in December, compared with estimates for a gain.
The report offers a cleaner read on manufacturing and overall employment after a strike involving 46,000 General Motors Co. workers subtracted from the October count and propped up the November reading.
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http://www.bloomberg.com/news/articles/2020-01-10/u-s-payrolls-trail-forecasts-wages-rise-least-since-mid-2018
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