It was both a great year for the U.S. jobs market, and the worst in almost a decade.

The final jobs report for the year, due Friday, is forecast to show employers added 160,000 jobs in December – down from November’s 266,000 but still well above what’s needed to accommodate population growth. That would bring the 2019 total to 2.14 million, thanks to resilient consumers and a jump in government spending.

The projected full-year figure would be about a quarter-million above what economists were expecting a year ago. But it’s also the slowest gain since 2011 and down from 2018’s more-robust 2.68 million. And both the 2018 and 2019 totals may be lowered in revisions due next month.

The broader picture of a slowdown is in line with what many economists expected in the 11th year of the record-long U.S. expansion, with fading stimulus from tax cuts and headwinds from tariff uncertainty also weighing on hiring.

For 2020, economists expect average monthly job gains to further moderate to 127,000 from 178,000 in 2019, a slowdown that could weigh on President Trump’s re-election chances. Uncertainty around the U.S.-China trade war, escalating tensions with Iran, the presidential election and slowing global demand threaten to further curb corporate investment while a dwindling pool of available workers limits supply.

It still may be too early to call a sharp slowdown in payrolls, after job gains unexpectedly accelerated in the final months of the year, outperforming projections.

“One lesson that we’ve learned from this cycle across the years is the consistent outperformance of the labor market,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.

With a few months of strong payrolls, elevated wage gains and an unemployment rate likely holding at a half-century low, the question becomes whether recent strength is an outlier or part of a sustainable trend.

Federal Reserve Chair Jerome Powell has repeatedly described the labor market as “strong” and “healthy.” With inflation persisting below the central bank’s 2 percent target, Powell has signaled he’d like to hold interest rates steady for some time, following three cuts in 2019, to bring even more left-behind Americans into the workforce.

Yet the mere fact that the recovery could be in its late stages may lead companies to curb hiring, said Michelle Meyer, head of U.S. economics at Bank of America Corp. Analysts surveyed by Bloomberg expect growth to cool to 1.8 percent this year – near what many Fed officials view as the long-run potential rate – from 2.3 percent in 2019.

“Businesses in general have remained more cautious, especially when it becomes harder and harder to plan and to rely on stronger economic growth three to five years down the line,” Meyer said.

No one in Bloomberg’s survey expects December’s job gain figure to match November’s 266,000, a tally that partly reflected the return of thousands of striking General Motors workers. In fact, JPMorgan Chase economist Daniel Silver cautions that last month’s figure could come in at a survey-low 125,000 due in part to calendar quirks, but payrolls would rebound in January.

Still, weaker-than-anticipated payrolls would have more impact in pressuring yields lower than a positive surprise would in the other direction, said Jim Caron, fixed-income portfolio manager at Morgan Stanley Investment Management Inc. “It’s harder to get higher and higher numbers now because we’re probably at full employment.”

Even with slower hiring, workers have seen stronger wage gains, particularly at the lower end. While overall pay growth has been muted compared to what was expected at this point in the expansion, production and nonsupervisory employees have seen their average hourly pay rise at the fastest pace in more than a decade.

For investors, the wage number will be the key point in this report, said Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter. Assuming annual pay gains hold around 3.1 percent and hiring is strong, stocks should rally: “The market will love it because that’s a Goldilocks outcome,” he said.

 

Bloomberg’s Emily Barrett and Vildana Hajric contributed.

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