WASHINGTON — 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.
Some Temporary Factors Could Distort November’s Jobs Data
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.
Consumer Confidence Has Slipped in Recent Months
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.