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 7:36 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.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 39133

Reported Deaths: 1514
CountyConfirmedDeaths
Hennepin12597787
Ramsey4963229
Dakota242192
Stearns241419
Anoka2266109
Nobles16726
Olmsted114715
Washington113740
Mower9602
Rice8488
Scott7624
Clay59138
Kandiyohi5781
Blue Earth4942
Wright4835
Todd4012
Carver3951
Lyon3272
Sherburne3255
Freeborn2970
Watonwan2380
Steele2371
Benton2203
St. Louis19615
Nicollet17312
Martin1715
Cottonwood1360
Goodhue1318
Winona12915
Crow Wing10812
Le Sueur1081
Pine1070
Chisago1021
Otter Tail1001
McLeod920
Dodge880
Carlton870
Unassigned8537
Polk822
Chippewa791
Isanti750
Waseca710
Douglas650
Murray650
Itasca6412
Meeker611
Morrison611
Faribault600
Pipestone592
Becker570
Jackson550
Sibley542
Pennington520
Renville362
Beltrami340
Brown342
Mille Lacs342
Wabasha330
Rock310
Fillmore300
Yellow Medicine300
Houston270
Swift221
Wilkin213
Norman200
Redwood190
Koochiching181
Grant170
Roseau170
Cass162
Aitkin150
Big Stone150
Kanabec151
Wadena150
Marshall120
Pope120
Lincoln100
Mahnomen101
Clearwater90
Hubbard80
Lake60
Stevens50
Traverse50
Lac qui Parle40
Red Lake40
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 32064

Reported Deaths: 731
CountyConfirmedDeaths
Polk6739181
Woodbury326044
Black Hawk232358
Buena Vista171911
Johnson13408
Linn130482
Dallas129129
Marshall106019
Scott84510
Story8063
Pottawattamie74512
Dubuque74222
Wapello70830
Crawford6783
Muscatine64944
Sioux4810
Tama46829
Wright3851
Louisa36313
Jasper32517
Plymouth3245
Warren2911
Dickinson2663
Webster2484
Washington2459
Cerro Gordo1901
Hamilton1891
Boone1501
Clay1370
Allamakee1334
Clarke1333
Mahaska11717
Shelby1170
Clinton1131
Poweshiek1078
Carroll991
Pocahontas981
Bremer957
Franklin950
Des Moines912
Emmet870
Henry863
Cedar851
Hardin810
Taylor800
Monona770
Cherokee761
Floyd732
Marion710
Benton681
Guthrie684
Jones640
Sac640
Jefferson620
Osceola620
Buchanan601
Butler592
Hancock551
Humboldt551
Calhoun542
Harrison540
Lee542
Iowa530
Delaware511
Monroe517
Fayette500
Madison482
Lyon450
Clayton443
Davis411
Mitchell410
Palo Alto410
Grundy400
Mills390
Winneshiek390
Kossuth360
Howard340
Jackson340
Union340
Lucas314
Chickasaw290
Greene290
Winnebago290
Cass240
Ida230
Appanoose213
Keokuk211
Van Buren210
Page200
Worth200
Adair160
Audubon161
Unassigned160
Ringgold150
Decatur120
Montgomery102
Wayne100
Adams80
Fremont80
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