U.S. services sector activity slowed in November but a resilient labor market suggested the economy remained on a steady growth path, Reuters reports.
Other data released this morning shows planned job cuts in November were the lowest in 14 months, with the purge in the oil sector appearing to be slowing. In addition, factory orders rebounded in October after two straight months of declines.
The Institute for Supply Management says its index of nonmanufacturing activity fell to 55.9 last month from a reading of 59.1 in October. A reading above 50 indicates expansion in the service sector.
Coming on the heels of a report this week showing manufacturing contracted in November for the first time in three years, the soft services sector report could raise concerns of a significant slowdown in the economy.
However, the labor market remains solid. And even as manufacturing is struggling from a strong dollar and energy sector spending cuts, some industries are showing strength.
In second report, the Labor Department says initial claims for state unemployment benefits increased 9,000 to a seasonally adjusted 269,000 for the week ended Nov. 28. It was the 39th straight week that claims held below 300,000, which is normally associated with a healthy labor market.
Claims are near levels last seen in 1973 and there is little room for further declines as the labor market normalizes. The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, fell 1,750 to 269,250 last week.
In a separate report, global outplacement consultancy Challenger, Gray & Christmas, Inc. says U.S.-based firms announced 30,953 job cuts in November. That was the smallest amount since September 2014 and down 39% from October. There were 1,355 oil-related job cuts, the fewest since June.
