WASHINGTON - Employers hired at a moderate pace in November and the unemployment rate held steady at a relatively low 4.7 percent, reassuring signs for an economy that is fighting to avoid a recession.
The Labor Department's report yesterday showed companies are still adding to their ranks - albeit at a slower pace - even as deepening troubles in the housing and credit markets are weighing heavily on national economic activity.
Employers added a net 94,000 new jobs to payrolls last month. That was down from a surprisingly strong gain of 170,000 jobs in October, but still sufficient to prevent the unemployment rate from rising. The jobless rate has held at 4.7 percent for three months.
"The economy has been hit by some large juggernauts, but the labor market is holding together reasonably well," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "Today's report would suggest there is no need to panic about the economy."
Still, fallout from the housing collapse was painfully evident. Construction companies slashed jobs last month. So did mortgage companies, banks, real estate firms, and manufacturers. Those losses, however, were more than offset by hiring gains elsewhere, including in healthcare, retail, hotels and motels, temporary help firms, computer services, and the government.
"Jobs growth near 100,000 combined with a steady unemployment rate does not signal an economy dipping into recession, and provides important support for consumer incomes," said Nigel Gault, economist at Global Insight.
The health of the nation's job market is a critical factor in determining whether the economy will weather the stresses from the housing collapse and credit crunch. Job and wage growth have been shock absorbers, helping individuals cope with negative forces in the economy. The employment climate has helped to support spending by individuals, a major shaper of overall economic activity.
Still, a lingering fear among economists is that consumers will cut back on spending, throwing the economy into a tailspin.
To stave off the possibility of a recession, the Federal Reserve has sliced a key interest rate twice this year. Many expect rates to be lowered for a third time when policy makers meet Tuesday. A reduction of at least one-quarter percentage point is hoped for as insurance against undue weakening in the economy, economists said.
On Wall Street, the Dow Jones industrials edged up 5.69 points to close at 13,625.58.
Workers' wages grew last month, with average hourly earnings rising to $17.63 in November, a 0.5 percent increase from October. It marked the biggest monthly gain since June. Over the past 12 months, wages increased 3.8 percent. High energy prices have pushed up inflation. But a sustained pickup in wages - if not blunted by other economic forces - can fan inflation.
Economic growth is expected to slow to 1.5 percent or less in the October-to-December period. Growth is expected to remain sluggish into 2008, and the unemployment rate is expected to climb to 5 percent by early next year.