US job creation stays strong as economy slows

The US economy continues to slow, but job creation and consumer spending remain strong despite a global economic slowdown, government statistics show.

The US Labor Department said employment increased by a seasonally adjusted 128,000 jobs in October despite a 40-day strike at General Motors that temporarily slashed payrolls by about 50,000.

Overall, the unemployment rate edged up from a 50-year low to 3.6 percent in October. Wage growth climbed 3 percent above the same period a year ago. However, the annualized rate dipped to 2.9 percent, the lowest since July 2018 but above the inflation rate.

Anecdotal evidence suggests some employers are offering other perks to attract and retain workers such as flex schedules, working from home or increased health benefits.

The percentage of Americans working or looking for a job rose in October to the highest level since August 2013, suggesting the strong demand for workers is drawing more people into the labor force as wage growth continues. The workforce-participation rate for those aged 25 to 54, prime working years, hit a 10-year high.

The Labor Department's report released Friday showed that job growth was stronger in August and September than previously believed. That suggests the US economy continues to grow at a stable but lower rate than it did a year ago despite fallout from the continuing US-China trade dispute and a global economic slowdown.

The Dow Jones Industrial Average and the Nasdaq Composite rose on the news. The S&P 500 recorded its third record close of the week.

US employers have added workers for 109 straight months, the longest period of job creation since 1939. On average, employers have added 167,000 new jobs each month this year. However, that's down from the average 223,000 jobs added each month last year. If the current trend continues, it will be the slowest year for job creation since 2010, Labor Department figures show.

Job growth remains strong in sectors of the US economy that are generally immune to the trade dispute. Healthcare and social services added 34,200 jobs in October, while business services added 22,000; hospitality, including restaurants, added 61,000, the Labor Department reported.

Corporate profits remain strong, and annualized economic growth is close to the 2 percent level reported prior to federal tax cuts passed in 2017. Growth has slowed from a 3 percent rate last year, but the chance of a recession appears low, the economic numbers suggest.

The jobless rate among Hispanics dipped to 3.9 percent in September and fell to 5.5 percent for African Americans, both record lows. Unemployment among Asian Americans was 2.5 percent in September. The jobless rate for adult women was 3.1 percent, the Labor Department reported.

"The best numbers that we've ever had: African American, Hispanic American, Asian American, women everything," US President Donald Trump told reporters Friday. "We have the best numbers that we've had in many, many, many decades."

Trump added: "We have the best economy we've ever had, we have the best job numbers in 51 years, the best unemployment numbers that we've had in half a century. People are working. They're making money."

The Institute for Supply Management, an independent research group based in Tempe, Arizona, said the manufacturing sector shrank in October despite the 126th consecutive month of expansion in the overall economy. Manufacturing represents about 11.6 percent of the US economy, and its importance continues to decline. Consumer spending represents about 66 percent of the economy.

Nevertheless, aside from the automotive sector, which lost jobs prior to the GM strike, manufacturers added more than 100,000 jobs in the last 12 months, suggesting a cooling but not a collapse in factory jobs.

Last week, the Federal Reserve cut interest rates for the third time this year but downplayed expectations for additional cuts.

The Federal Open Market Committee (FOMC) cut interest rates a quarter-point to 1.50 to 1.75 percent after reducing rates a quarter-point in July and in September. Eight of 10 officials voted to cut rates, while two voted to hold rates steady. The action followed nine rate increases since December 2015, including four hikes last year.