(USA Today) - The labor market slowed in December as U.S. employers added 148,000 jobs in a sign that worker shortages may crimp hiring in 2018.
The unemployment rate, which is calculated from a different survey, was unchanged at 4.1%, the Labor Department said Friday.
The report provides the first unvarnished glimpse of hiring in several months. Average job growth topped 200,000 in October and November but economists attributed much of the increase to a bounce-back after hurricanes in Texas and Florida kept workers at home and suppressed September payrolls.
Last month, average hourly wages rose nine cents to $26.63, nudging the annual increase to 2.5% from 2.4%. Pay gains have been stuck at about 2.5% for well over a year. Economists have expected a bigger spike because of the low unemployment rate that’s making it tougher for employers to find workers.
Businesses added 146,000 jobs. Federal, state and local governments added 2,000.
Job gains for October and November were revised down by a total 9,000. October’s was revised to 211,000 from 244,000 and November’s was upgraded to 252,000 from 228,000.
A broader unemployment measure that includes discouraged workers and part-timers who prefer full-time jobs, as well as the unemployed, ticked up to 8.1% from 8% but is down from 9.1% a year ago.
For the year, monthly job gains averaged 171,000, down from 187,000 in 2016 and 226,000 in 2015. Many economists expect average increases of about 160,000 in 2018,as the low unemployment rate offers employers a smaller pool of available workers. In December, Goldman Sachs said winter storms also tempered employment. Yet even that more moderate pace would be far more than enough to continue pushing down the jobless rate. And the smaller stock of job candidates should ignite faster wage gains as businesses compete more intensely for applicants.
Other economists, however, point to a shadow supply of workers who aren’t counted in the official unemployment rate, such as discouraged Americans who stopped looking for jobs but may be lured back into an improving market. That group could keep hiring elevated and temper pay increases well into 2018.
Other recent labor market indicators have been encouraging. Payroll processor ADP this week said businesses added 250,000 jobs in December. And surveys of the manufacturing and service sectors continue to show sharp pickups in activity.
Many economists believe the economy grew at early a 3% annual pace during the last three months of the year. That would mark the third straight quarter of advances at or above the sturdy 3% level.