The news from the Department of Labor that U.S. payrolls increased by 150,000 in October was greeted with lukewarm enthusiasm, as the predicted growth fell short of expectations.
Analysts had predicted a gain of 200,000 jobs during the month, but the numbers instead revealed that the job market is weakening after several months of strong growth. Private payrolls rose by 126,000, while government payrolls grew by 24,000.
In the wake of the news, the unemployment rate dipped to 3.6 percent, the lowest rate since 1969. However, job growth has slowed considerably as the labor market tightens and employers struggle to find workers to fill open positions.
The weak job numbers could be just a blip or they could indicate a deeper economic slowdown ahead, depending on the conditions that emerge during the final stretch of the year.
Some experts have attributed the sluggish job numbers to the impact of President Donald Trump’s trade war with China, which has led to uncertainty and dampened investment. It has also put a drag on job growth in some industries, particularly manufacturing, where payrolls shrunk by 36,000 during October.
The slowdown in job growth comes as wage increases have begun to decelerate. Average hourly earnings, rose 0.2 percent during October, falling short of forecasts.
Nevertheless, despite the weak jobs report, a separate set of data indicates that consumer spending remains strong and that the economy may still be able to avoid a recession. The economy has experienced record-long growth and the most recent GDP report estimated the economy grew at 1.9 percent in the third quarter, beating analysts’ expectations.
It remains to be seen just how much consumer spending and job growth will moderate over the final months of the year, but the October report suggests that the economy may be losing steam as the year draws to a close.