By Sarah Chaney
WASHINGTON -- Job openings declined sharply in November, a sign of weakening employer demand that could restrain job growth in 2020.
Job openings fell 10.8% in November from a year earlier to 6.8 million, the Labor Department said Friday. That marked the sixth straight month of annual declines and was the steepest fall since December 2009, when openings dropped 18.7% from a year earlier.
"Pullback in employer demand is leading to a leveling off of momentum in the labor market and also in the bargaining power for job seekers," Nick Bunker, economist at Indeed, said.
Separate economic data on industrial production and housing starts released Friday shed light on other parts of the U.S. economy affected by unseasonably warm weather.
Job openings peaked at 7.6 million in November 2018 and have declined about 800,000 since then. They remain elevated compared with pre-2018 years. Many businesses cite widespread labor shortages as a factor holding back job growth, according to the Federal's "beige book," a collection of anecdotal reports from businesses around the country.
The job market broadly remains in solid shape. Openings continued to run higher than the number of unemployed workers for the 21st straight month in November. Further, the U.S. labor market is still adding jobs at a steady pace and the unemployment rate is at a half-century low of 3.5%. One missing piece has been wages, which grew 2.9% in December from a year earlier, the smallest gain since July 2018.
Still, economists surveyed by The Wall Street Journal expect payroll gains to slow in 2020 as the pace of hiring eases. Economists expect monthly nonfarm-payroll gains to average 116,650 in the fourth quarter of 2020, down from the fourth quarter of 2019.
The rate at which workers are quitting their jobs isn't budging, a possible explanation for sluggish pay growth. Workers tend to command higher pay when they move from one job to another. The so-called quits rate logged in at 2.3% in November for the ninth time in 2019.
In 2019, the U.S. labor market was a source of strength while manufacturing activity at home and abroad faltered.
In December, there were signs of reversal in the goods-producing sector. Manufacturing output crept up, according to a Federal Reserve report. That could reflect early reaction to the agreement between U.S. and Chinese officials to the first phase of a trade deal, a truce in a dispute that weighed on global manufacturing for much of last year.
Separately, utilities production declined by 5.6% because of lower demand for heating due to unseasonably warm December weather, the Federal Reserve said.
Mild winter weather also helped boost housing starts in December, analysts noted. U.S. housing starts increased to a seasonally adjusted annual rate of 1.608 million in December, the highest level since December 2006, Friday's Commerce Department report showed.
Starts have increased the past three months, suggesting historically low mortgage rates coupled with a favorable U.S. economy are supporting the U.S. housing market.
Write to Sarah Chaney at firstname.lastname@example.org
(END) Dow Jones Newswires
January 17, 2020 13:36 ET (18:36 GMT)
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