After a difficult week for the stock market and rising trade tensions, the November jobs report provided evidence that the economy remains strong.<\/b>
\nMILWAUKEE \u2014 At Western Building Products\u2019 banana-shaped factory on the lip of the Menomonee River outside Milwaukee, the company\u2019s president, Mark Willey, is wrangling with a stubborn problem: not enough workers.
\u201cIf someone is here a year, they never leave,\u201d Mr. Willey said. \u201cOur problem today is just finding people who want to work.\u201d
It is a headache employers across the country are confronting, as Friday\u2019s monthly jobs report from the government illustrated. The unemployment rate in November held steady at 3.7 percent \u2014 the lowest in nearly half a century. And while the pace of hiring slowed to 155,000 from October\u2019s above-average showing, the parade of payroll gains marched on uninterrupted for the 98th month.
After a week in which the stock market suffered from motion sickness and presidential tweets caused trade tensions to flare, the labor market\u2019s steadiness offered a dose of calm.
\u201cIt\u2019s obviously an economy that is well in expansion mode but that is coming off the boil after a strong second and third quarter,\u201d said David Donabedian, chief investment officer of CIBC Private Wealth Management. \u201cSo the state of the job market is good. It\u2019s just that the pace of job creation is slowing a little bit.\u201d
The average monthly job gain clocked in at 170,000 for the last three months and more than 200,000 for the year.
Average hourly earnings rose 0.2 percent in November, keeping the year-over-year average at 3.1 percent for the second month in a row, a level not seen since the recession. \u201cIf you have solid wage growth while productivity is improving, that is the best of both worlds,\u201d Mr. Donabedian said.
The labor shortage has been a boon to workers who were hit hardest during the recession: Minimum-wage earners, African-Americans, Latinos and Americans with a high school degree or less have all seen their jobless rates decline in recent months.
Many of them were able to find jobs in health care, manufacturing, and transportation and warehousing, which were among the strongest job-creating sectors.
Employers added 27,000 manufacturing jobs in November, on top of nearly 300,000 positions in the previous 12 months.
Those who are doing the hiring, though, have repeatedly complained that the field of available workers has been picked through, and that people with sufficient skills are particularly scarce.
At Western in the Milwaukee area \u2014 where the jobless rate is down to 3 percent \u2014 workers bundled against the cold unloaded door frames on Friday. Elsewhere, millwork employees used palm sanders to smooth down doors suspended back to front from a conveyor, like a scaled-down, less colorful version of Disney\u2019s animated \u201cMonsters, Inc.\u201d factory .
This December has been unusually busy, said Mr. Willey, who is finishing up his 42nd year at the factory, where he started as a seasonal worker. The company has 217 people on staff and expects to raise the total to 230 next year.
Entry-level wages are $12.50 an hour, while the typical worker earns nearly $17 an hour plus benefits. Because the business is 100 percent employee owned, workers build up equity in the company after a year, which Mr. Willey said amounted to a 25 percent raise. He and his colleagues have batted around the idea of raising starting wages to $16 an hour, but \u201cwe have to have the productivity for it to make sense,\u201d he said.
Western has used temporary agencies and employs inmates from a nearby correctional facility as part of a work-release program. \u201cWhen they get released, we hire them,\u201d Mr. Willey said. \u201cSome we even hire while they\u2019re still in.\u201d
The company is also working with local high schools that teach students the building trades. \u201cWe\u2019ve had a few coming by, hoping they\u2019ll want to work here when they graduate,\u201d Mr. Willey said.
As for workers, in national surveys they have complained for years about sluggish wage growth and nipped opportunities for advancement.
A growing number of workers say they are willing to take the risk of hopping to another job in search of higher pay and more responsibility, according to Gartner, a research and consulting firm that conducts a quarterly national survey of 20,000 employees at companies valued at $100 million or more.
\u201cOne of the things we\u2019ve seen is that it\u2019s harder for employees to get promoted nowadays,\u201d said Brian Kropp, vice president for human resources at Gartner. In 2006, for example, it took an average of about two and a half years to get a promotion, compared with four and a half years now.
The result has been growing dissatisfaction and resentment. The share of employees who say they are willing to go above and beyond at work has dropped, Mr. Kropp said. One in four employees used to report giving work an extra oomph \u2014 something Gartner calls \u201cdiscretionary effort.\u201d Now, it\u2019s closer to one in six.
The reason, Mr. Kropp said, is simple: Workers are not being rewarded for their efforts.
At Western, business has been good enough that the 82-year-old company is scouting for a location to build a bigger factory. Mr. Willey, though, is worried that the economy will cool over the next couple of years.
A shortage of workers in the building trades has caused projects to back up. At the same time, interest rates have climbed and tariffs put in place by President Trump have bumped up the cost of materials. Mr. Willey pointed to the aluminum sills that run along the bottom of doors, and the steel hinges bolted onto the sides.
As a result, some buyers may simply choose not to go forward.
\u201cEverybody\u2019s keeping their fingers crossed,\u201d Mr. Willey said, referring to hopes of a trade agreement between the Trump administration and China. If no deal is reached, the president has threatened to raise tariffs on $200 billion of Chinese goods to 25 percent, from 10 percent.
Uncertainty about trade policy is fueling anxiety in all corners of the economy.
\u201cThat is the biggest impediment now,\u201d Chris Rupkey, chief financial economist at MUFG, said. \u201cThe ball is in the president\u2019s court to make sure the China deal is still on.\u201d
Manufacturing and related sectors tend to be more susceptible to economic cycles and are particularly vulnerable to tariffs.
The Commerce Department has reported that construction of single-family homes fell for the second month in a row in October. Slackening auto sales were part of the reason General Motors announced last week that it would idle five plants and cut about 14,000 jobs in North America. Ford has also announced plans to trim its work force.
Friday\u2019s jobs report, which provided a welcome counterpoint to slowdowns, layoff announcements and stock market swings, is unlikely to deter policymakers at the Federal Reserve from raising benchmark interest rates when they meet on Dec. 18 and 19.
Next year is a different story. Most analysts expect that the slowing pace of job creation will encourage the central bank to take a more cautious approach in the future.
The jobs report, of course, is a temporary and incomplete snapshot of the labor market. Last month\u2019s figures will be revised twice. Revisions announced in this report trimmed 12,000 job gains from the September and October data.
Whether a tightening market can bring in sidelined workers is still a subject of keen debate. The share of adults in the work force remains stuck at unusually low levels \u2014 under 63 percent in November. A broader measure of unemployment that includes workers too discouraged to search for a job, and part-timers who would prefer full-time work, ticked up to 7.6 percent in November, from 7.4 percent the previous month. Long-term unemployment is also double what it was in the early 2000s.
\u201cEven now, at this point in the recovery,\u201d Martha Gimbel, research director at the job-search site Indeed, said, \u201cone of the fastest growing jobs search terms on Indeed is people looking for \u2018full-time work.\u2019\u201d<\/p>\n