Trump warns China: 'I'm a tariff man'

Uncertainty over a trade truce with China wiped out the market rally from a day before. CNN's Clare Sebastian reports.

Posted: Dec 6, 2018 7:55 PM
Updated: Dec 6, 2018 7:55 PM

America's economy is flashing some warning signs, but -- for now -- the labor market appears to be going strong.

In advance of Friday's jobs report, economists polled by Refinitiv estimate that employers added 200,000 jobs in November, with the unemployment rate remaining at 3.7% and average hourly earnings growing 3.1% from the same month last year. The numbers will reflect higher-than-usual holiday hiring, as retailers anticipate a robust Christmas season.

America's employers have added an average of 215,000 jobs per month over the past year and wages have been slowly creeping higher as the economy has soaked up nearly all its available workers, prompting businesses to offer higher salaries, better benefits and more perks. Some economists expect the unemployment rate to sink even lower by the end of 2019, bottoming out at 3.2%. That would be the tightest labor market in 65 years.

"At this point in an expansion, we should have seen much higher wages, so I think that's finally starting to kick in," says Robert Frick, chief economist for Navy Federal Credit Union. Mentions of labor shortages and fatter paychecks peppered Wednesday's edition of the Federal Reserve's Beige Book, with one report of employees "ghosting" on companies for better jobs elsewhere.

Faster wage growth can rattle Wall Street, as it puts pressure on corporate profit margins and raises fears that the Fed will hike interest rates to forestall inflation. But recent statements from Fed officials, including Chairman Jay Powell, have indicated mounting caution about moving too quickly.

"With inflation tame, this is the perfect time for people to be making more," Frick says. "As long as spending is going up, profits are going to go up and companies are going to have to invest to become more efficient, and that's an absolute good."

However, the jobs report will land at a time when markets are getting increasingly nervous that an economic cooling off period is around the corner.

One indicator: The housing market is in the middle of a dramatic slowdown, as low inventory and rising mortgage rates have dissuaded would-be home buyers and sellers. Housing accounts for nearly 15% of the economy, and the decline in new home sales may turn into a decline in construction jobs -- even as falling prices could be good news for Americans struggling to afford a place to live.

Another troubling sign: The "yield curve," or the difference between interest rates on 3-year and 5-year bonds, inverted for the first time since the Great Recession this week. Historically, when investors think that short-term bonds are riskier, economic downturns nearly always follow. (Another closely-watched pairing, the difference between 2-year and 10-year bonds, hasn't turned negative yet.)

Declining growth in other countries could eventually create a drag on America as well.

That doesn't mean a recession is necessarily around the corner. Most forecasters don't expect any kind of crash in 2019, unless trade wars escalate or the Fed hikes rates too quickly. This won't be the last solid jobs report — but there may not be many in the not-too-distant future.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 313166

Reported Deaths: 7228
CountyCasesDeaths
DeSoto21496257
Hinds20294414
Harrison17814309
Rankin13573278
Jackson13411246
Madison10066217
Lee9962173
Jones8364163
Forrest7649152
Lauderdale7181240
Lowndes6370145
Lamar621686
Lafayette6171118
Washington5323133
Bolivar4797132
Oktibbeha461498
Panola4561105
Pearl River4499145
Marshall4397103
Warren4380121
Pontotoc419572
Monroe4100133
Union409076
Neshoba4026176
Lincoln3950110
Hancock377786
Leflore3487125
Sunflower335790
Tate332484
Pike3301105
Scott315373
Alcorn311968
Yazoo310769
Itawamba299477
Copiah296465
Simpson294788
Coahoma294379
Tippah287768
Prentiss279560
Adams269582
Marion268880
Leake266273
Wayne262341
Grenada260386
Covington256381
George246848
Newton246061
Winston226881
Tishomingo225967
Jasper220848
Attala214173
Chickasaw207157
Holmes188673
Clay184754
Stone182033
Tallahatchie178140
Clarke177879
Calhoun170132
Yalobusha163337
Smith162234
Walthall133845
Greene130333
Lawrence128323
Montgomery126742
Noxubee126734
Perry125938
Amite122842
Carroll121728
Webster114532
Jefferson Davis106932
Tunica104826
Claiborne102230
Benton99125
Humphreys96133
Kemper95428
Franklin83623
Quitman80216
Choctaw76118
Wilkinson66930
Jefferson65428
Sharkey50317
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 530988

Reported Deaths: 10978
CountyCasesDeaths
Jefferson765291522
Mobile40971804
Madison34751503
Tuscaloosa25775452
Montgomery24329589
Shelby23431249
Baldwin21131308
Lee15884171
Calhoun14501314
Morgan14293279
Etowah13831353
Marshall12222223
Houston10567281
Elmore10061205
Limestone9960151
Cullman9664193
St. Clair9655243
Lauderdale9424241
DeKalb8830186
Talladega8223176
Walker7235277
Autauga6920108
Jackson6810112
Blount6660137
Colbert6298134
Coffee5511119
Dale4831111
Russell441138
Chilton4290112
Franklin425782
Covington4121118
Tallapoosa4027152
Escambia393376
Chambers3563123
Dallas3551151
Clarke351061
Marion3118101
Pike310877
Lawrence300298
Winston274472
Bibb260764
Geneva249977
Marengo249764
Pickens234461
Barbour230857
Hale222977
Butler215969
Fayette212362
Henry188744
Cherokee184845
Randolph180241
Monroe177440
Washington167339
Macon159150
Clay156256
Crenshaw152257
Cleburne148941
Lamar142535
Lowndes138853
Wilcox127130
Bullock123041
Conecuh110529
Perry107726
Coosa107228
Sumter104532
Greene92334
Choctaw60624
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Columbus
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Oxford
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A frontal system to the south of our area will linger for a few more days. This lingering will linger some more chances for some showers and thunderstorms in our weather forecast over the next few days.
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