NEW YORK – A surprisingly soft 112,000 new U.S. jobs were created in November, the Labor Department (search) said on Friday — the weakest gain in five months and about half of what economists had forecast.
The news cast a shadow across an already downbeat holiday sales season, with consumers apparently worried by scarce work and high oil prices.
The November figure came in well below Wall Street economists' forecasts for at least 180,000 new jobs, though the unemployment rate (search) eased to 5.4 percent from 5.5 percent in October.
The battered U.S. dollar came under renewed pressure immediately after the jobs data, losing more ground against the euro.
In addition, Labor lowered its estimates for job growth in both September and October. The department lowered from 337,000 to 303,000 its previous estimate of new jobs during that month. Economists say the job boom that month was fueled by hurricane cleanup activity. September's job numbers also were changed, falling 20,000 to 119,000.
But some economists weren't pessimistic.
"It's not great job growth, but it's decent," said Joel Naroff, president of Naroff Economic Advisors. "It is decent enough to create income and spending," which will keep the economy chugging.
Consumer spending accounts for two-thirds of total economic activity, and is being closely watched, especially during this time of the year. Analysts were concerned about the big jump in oil prices earlier this year, which jolted consumers and slowed the overall economy dramatically. Though prices have eased, they may be holding down job growth.
The White House noted that new jobs have been created for 15 straight months. "The economy is continuing to grow stronger with more than 2 million jobs created this year," said spokesman Scott McClellan. "The president's economic policies are working."
Some of the weaker performance reflected a trailing off of October's heavy construction activity in Southeastern states after four hurricanes swept through the region.
Only 11,000 construction jobs were added last month, compared with 65,000 in October. October's construction gain was the strongest since March 2000.
Manufacturing employment posted a third successive monthly drop in November, losing 5,000 jobs after what had appeared to be the beginning of a recovery in the hard-hit sector earlier this year.
The report showed some 16,000 retail jobs were lost in November -- a tally that surprised analysts since the vital Thanksgiving-to-Christmas holiday sales season generally sees retailers adding to their job rosters.
Average hourly earnings barely edged up to $15.83 from $15.82 in October, the smallest increase for any month this year and a sharp contrast to the steep escalation in gasoline and energy prices that have sapped spending power.
Early reports from U.S. retailers have indicated a disappointing start to holiday sales on the post-Thanksgiving weekend and reports say some of the biggest, such as Wal-Mart (WMT), already are discounting some items to try to spur business.
Economists still expect the Federal Reserve (search) to raise a key interest rate by one-quarter percentage point to 2.25 percent at its Dec. 14 meeting, the final session of the year.
"The Fed doesn't react emotionally to temporary ups and downs of these numbers," Naroff said. "They're saying, 'Yeah, businesses aren't out there hiring like mad, but they're hiring.'"
Reuters and the Associated Press contributed to this report.
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