US job growth slows as economic momentum ebbs

WASHINGTON, Dec 7, 2007 (AFP) - US job creation slowed in November, although not as badly as anticipated by most economists, confirming expectations of cooling economic growth, a government report showed Friday.

The Labor Department said in a monthly snapshot that the world's biggest economy generated 94,000 new jobs in November after creating 170,000 posts in October, but hiring was stronger than most analysts had forecast.

Economists had expected hiring in November would slow to around 70,000 new positions.

The report is consistent with slowing economic growth, but not necessarily a harbinger of a severe economic downturn that some analysts have predicted.

The national unemployment rate remained unchanged at 4.7 percent, according to the Labor Department survey.

"While not robust, the report suggests ongoing resiliency in the face of the recent credit tightness and financial market turmoil," said Stephen Gallagher, an economist at Societe Generale.

Economists say the world's largest economy needs to create between 110,000 and 140,000 posts a month to absorb new labor market entrants, so November's reading appeared lackluster.

Job growth was largely bolstered last month by hiring in the services sector which created 127,000 new jobs while the professional and business services sector generated 30,000 new positions.

Government hiring swelled payrolls by 30,000 new posts while the education and health services industries created 28,000 positions.

Job losses in other industries offset the gains triggered mainly by the buoyant services sector.

The goods-producing sector lost 33,000 positions while the construction industry shed 24,000 posts and the manufacturing sector lost 11,000 jobs.

The slowdown in overall job creation reflects a cooldown in economic momentum days before the Federal Reserve meets to mull US interest rates.

Fed chairman Ben Bernanke has warned that US economic growth is likely to slow in coming months amid a prolonged housing market slump, tighter credit markets and high energy costs.

Most economists expect the Fed to trim interest rates again on December 11 following two back-to-back rate cuts in September and October. The short-term Fed funds rate is presently anchored at 4.50 percent.

"We were looking for 25 basis points before the report and that continues to be our view," said Peter Buchanan, a senior economist at CIBC World Markets in Toronto.

Most economists, including Gallagher, are similarly expecting the Fed to unleash a quarter point cut in the Fed funds rate early next week in a bid to underpin economic growth.

Some analysts, however, believe the central bank could slash borrowing costs by a larger half a percentage point.

The government survey also revealed that average hourly earnings ticked up 0.5 percent in November to 17.63 dollars. Most economists had predicted an uptick in earnings of only 0.3 percent.

Average hourly earnings have surged 3.8 percent in the year to November.