n Moderate pace helps economy weather housing, credit storms.
By JEANNINE AVERSA
The Associated Press
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 Friday showed that 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 their payrolls last month. That was down from a surprisingly strong gain of 170,000 jobs in October but was still sufficient to prevent the unemployment rate from rising. The jobless rate has held steady at 4.7 percent for three months in a row.
"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 health care, 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, in fact, weather the stresses from the housing collapse and credit crunch. Job and wage growth have been shock absorbers, helping individuals to cope with all the 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 their spending, throwing the economy into a tailspin. The odds of a recession have grown this year, although Federal Reserve officials, the Bush administration and others are hopeful the country can avoid one.
Average hourly earnings rose 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 and probably made some workers feel like their paychecks aren't stretching as far as they would like, some analysts said.