The U.S. economy created 112,000 jobs in November, a number well below market expectations. Some economists predict sluggish job growth will translate into slower economic growth.
Financial markets had anticipated that job growth would be twice as high as what the Labor Department actually reported. Even the impressive 337,000 new job total announced for October was revised down by 35,000. Still, the unemployment rate fell back slightly to 5.4 percent of the labor force.
Peter Morici, an economist at the University of Maryland, says the jobless figures also reveal very sluggish growth in wages, a trend that he believes will restrain overall growth.
"The trend in wage growth is very modest. It appears that real incomes are either stagnant or declining," said Mr. Morici. "People still have as much money in their pocket to spend, but with rising energy prices, it reduces their purchasing power."
The U.S. economy has been growing at about a four percent annual rate. However, gasoline prices have risen by over 30 percent in the past year. Oil prices have declined modestly over the past month.
The dollar, which has been weak and declining against the euro and several other currencies, fell further on news of the weak jobs report. However, the stock market, which has been strong for the past six months, rallied on the news, as some economists believe weaker than expected employment growth may cause the central bank to go slow on further increases in short-term interest rates.