(John Kemp is a Reuters market analyst. The views expressed are his own)
* Chartbook: tmsnrt.rs/2Kp5Yb1
By John Kemp
LONDON, Aug 2 (Reuters) - U.S. non-farm employment is at record levels but there are signs demand for labour is starting to soften in parts of the economy most exposed to manufacturing and international trade.
The total number of non-farm jobs rose 1.49% in the three months from May to July compared with the same period a year earlier, according to data published on Friday by the U.S. Bureau of Labor Statistics.
But the rate of job creation was the slowest since the period August to November 2017 and before that late 2011, when the economy was still emerging from recession.
Manufacturing employment was up by just 1.26% in the three months to July compared with the same period a year ago, down from growth of over 2% year-on-year at the same point in 2018.
Manufacturers cut the average workweek to 41.5 hours in July, down from 42.2 hours in July 2018, and the lowest number of hours since the start of 2014 (tmsnrt.rs/2Kp5Yb1).
Manufacturing overtime fell to an average of 4.0 hours per week, the lowest for more than eight years, in a clear sign of waning labour demand.
Employment in transportation and warehousing rose 2.66% in May-July compared with a year earlier, the slowest growth since June-August 2016 and before that February-April 2014.
The manufacturing and freight slowdown evident since the middle of last year as a result of the trade conflict with China and heightened business uncertainty is hitting labour demand in the industrial economy.
Jobs in oil and gas have also started to decline as lower prices filter through to lower rates of drilling and completions.
Job growth increasingly relies on services, but here too there are signs that the rate of employment creation is slowing.
Private service-sector jobs rose 1.64% in May-July compared with a year earlier, among the slowest growth rates since 2011.
Beneath the still reasonable headline figures, many parts of the U.S. economy are starting to show the strain from an extended trade war with China and increasing business uncertainty that is hampering investment.
Manufacturers and many other businesses desperately need a reduction in policy volatility and economic uncertainty to make long-term spending commitments.
- Oil plunges as U.S. tariff threat boosts probability of recession (Reuters, Aug. 2)
- U.S. and China talk as manufacturers slump (Reuters, Aug. 1)
- Trade war rebounds on the United States (Reuters, July 9) (Editing by Larry King)