US employment grows by 39,000

The US employment report produced a big disappointment on Friday. MarketWatch reports:

The U.S. economy added jobs at a much slower pace in November than in October, suggesting that the economy will continue to struggle in coming months.

Nonfarm payrolls rose by 39,000 in November, far lower than the 155,000 gain expected by economists surveyed by MarketWatch and the upwardly revised figure of 172,000 jobs gained in October.

The unemployment rate unexpectedly rose to 9.8% in November from 9.6% in October according to a separate survey of 60,000 households. Economists had been expecting the unemployment rate to remain steady. This is the highest unemployment rate since April.

There were no disappointments though from the other major US economic reports on Friday. From The Wall Street Journal:

The ISM's nonmanufacturing headline purchasing managers' index rose to 55.0 last month from 54.3 in October. Forecasters surveyed by Dow Jones Newswires had expected the November PMI to edge up to 55.0. Readings above 50 indicate expanding activity...

Orders for manufactured goods decreased 0.9% to $420.09 billion, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires had forecast a 1.1% decline in factory goods in October.

Factory orders over the previous month were revised up to a 3.0% increase, however, versus the initial estimate of a 2.1% gain.

The data from Europe on Friday were positive. Bloomberg reports:

Growth in Europe’s services and manufacturing industries accelerated at a faster pace than initially estimated and retail sales increased more than economists forecast, led by Germany.

A composite index based on a survey of euro-area purchasing managers in services businesses and factories climbed to 55.5 in November from 53.8 in October, London-based Markit Economics said today. It initially reported a gain to 55.4. Retail sales rose 0.5 percent in October, the European Union statistics office in Luxembourg said. Economists forecast 0.2 percent, the median of 19 estimates in a Bloomberg News survey shows...

A gauge of services industries increased to 55.4 from 53.3, Markit said. A reading above 50 indicates expansion.

In the UK, services continued to grow in November but at a slower pace. The Daily Mail reports:

The UK services sector grew slower in November compared to the previous month, new figures have suggested.

The latest Markit/CIPS Purchasing Managers' Index survey showed a marginal decline from 53.2 in October to 53 in November - a reading above 50 indicates growth.

China's services industries, however, saw a sharp slowdown in November. From Bloomberg:

China’s non-manufacturing purchasing managers’ index fell to a nine-month low in November as accelerating inflation eroded service companies’ margins.

The index dropped to 53.2 from 60.5 in October, according to a statement today by the Beijing-based National Bureau of Statistics and the Federation of Logistics and Purchasing. A reading above 50 indicates an expansion. A separate service PMI released by HSBC Holdings Plc fell to 53.1, a near two-year low.

Some cooling in China's economy isn't necessarily unwelcome though. AFP/CNA reports possible further tightening action from policy-makers:

China pledged Friday to tighten monetary policy next year -- a sign that new interest rate hikes are imminent, analysts say, as the world's second-largest economy steps up its battle against inflation.

The ruling Communist party's politburo decided to shift its monetary policy stance from "relatively loose" to "prudent", the Xinhua news agency reported.