U.S. hiring activity decelerates in November, jobless rate unchanged at 3.7 pct

U.S. hiring activity decelerated in November. Nonfarm payrolls rose by 155k positions. The weak reading came after a rise of 237k gain in October. Combined with hurricane-weakened readings earlier in the fall, hiring has decelerated to 196k jobs per month on average over the last six months.

The disappointing headline figure is slightly mitigated by the jobless rate holding at its cycle low of 3.7 percent for the third straight month. The overall labor force participation pace also held on to its October gain, and is at 62.9 percent – widely unchanged in the past year.

Hiring activity decelerated for both the goods and services sides of the economy. Areas of strength included healthcare, manufacturing and transportation and warehousing. The deceleration in hiring was widespread.

The closely watched measure of wage growth rose 0.2 percent sequentially as markets were expecting. Wages rose 3.1 percent over the past 12 months, the same as in October.

Today’s figure will not help in changing the pessimistic mood on financial markets this week, but a slower rate of hiring was bound to happen, noted TD Economics in a research report. As labor markets tighten, it gets difficult for employers to find people to hire. Hiring has averaged 195k new jobs per month in the past six month, which marks a slowdown from 215k-ish pace seen through much of 2018. However, it is still above the trend through most of 2017.

“The Federal Reserve is not likely to put too much weight on a one-month moderation in hiring activity, and will likely focus on broader measures of labor market slack, like the unemployment rate or wage growth, which remained steady in November”, said TD Economics.

While price pressures are expected to rebound in the months ahead, above-target inflation is less of a threat for the Fed. This supports the expectation that Fed hikes will be more gradual next year, as the economy slows, added TD Economics.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -35.2021. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex