November reading shows far fewer jobs added than expected; unemployment rate falls to 5.4%.
December 3, 2004: 8:47 AM EST
NEW YORK (CNN/Money) - Job growth slowed significantly in November, according to a government report Friday that came in far weaker than Wall Street forecasts and cut the strong number reported in the previous month.
The Labor Department report showed a net gain of 112,000 jobs in November, down from the revised 303,000. Economists surveyed by Briefing.com had forecast an increase of 200,000 jobs in the period.
The unemployment rate slipped to 5.4 percent from 5.5 percent in October. Economists had forecast a 5.4 percent rate for November.
One factor behind the weaker than expected job growth is a loss of 16,000 jobs in the retail sector. The Labor Department makes a seasonal adjustment to account for the pre-holiday hiring by retailers and some economists warned that the weaker-than-expected number could be caused at least partly by that adjustment.
But the manufacturing sector also lost 5,000 jobs according to the report, and the government revised lower the gains originally reported in both September and October.
October had originally been posted as a 337,000 job gain, well above forecasts at the time, while September was revised to a 119,000 job gain, down from earlier reading of 139,000.
Bond prices rose and yields on the 10-year treasury fell to 4.33 percent from about 4.40 percent before the report, as traders saw this weakness as perhaps slowing the Federal Reserve's plans for measured interest rate hikes.
Most economists still expect another quarter-percentage point rate hike at the Dec. 14 meeting. U.S. stock futures fell on concerns about weakness in the U.S. economy heading into the holiday period.
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