The US economy gained a modest 94,000 jobs in November, the Labour Department reported yesterday, a significant pullback from the previous month. This is the clearest sign yet that the American economy seems headed for a major slowdown.

However, the jobs report, a significant indicator of the health of the economy, also indicated that the US has not slipped into a recession, and might not be weakening as quickly as some experts fear. Analysts say a more accurate prognosis of the economy may not emerge until next year.

The unemployment rate held steady at 4.7 per cent for the third consecutive month, as a survey of households found strong growth in the number of people saying they found new jobs last month. The job creation numbers, say analysts, indicate a very fragile economy that may come undone unless conditions improve soon.

On Wall Street, the employment numbers seemed to offer some comfort that the economy was not plummeting, and might even continue to expand and sustain corporate profits. But the silver lining is overshadowed by dark clouds of uncertainty about whether the US Federal Reserve would feel less pressure to cut interest rates aggressively when it meets on Tuesday 11 December.

The US financial markets favour a half-point cut in the Fed''s key bank rates, currently at 4.5 per cent. A stronger job market, however, makes a quarter-point cut in the federal funds rate more likely.

Central bankers have indicated that they want to avert a recession with looser credit, but they also remain wary of fuelling inflation with an unnecessarily sharp rate cut, in a background of high oil costs and rising food prices.

The jobs report shows that average hourly wages among rank-and-file workers - about four-fifths of the work force - rose 8 cents to $17.63 last month. But the November wage numbers also point to a longer-term decline in spending power for most American workers.

Americans at the top of the income ladder have mostly done well, but wage gains in the current economic expansion have been generally weak. The inflation-adjusted hourly wage for rank-and-file workers has risen by just one cent over the last four years; it was $17.62 in November 2003. Over the last year, it has fallen, creating anxieties among workers about their economic security.

The biggest job losses were in the housing sector, which has been hit hard this year by the bursting of the real estate bubble. Employment in services rose, however, with business and professional services up a healthy 30,000. Education and health gained jobs, while retail payrolls broke a string of three consecutive losses to increase by more than 24,000.

All the figures are adjusted to take account of seasonal variations and include the Labour Department''s best estimate of jobs created by new firms, which makes them subject to potentially large revisions next year.

A general sense of insecurity continues to gnaw at the economy, with consumer confidence dropping to its lowest level in more than two years, according to a survey released yesterday by the University of Michigan.

Consumer spending makes up 70 per cent of the American economy. Economists worry that a weakening job market will translate into less spending, which could trigger a destructive downward spiral of weaker investment as sales dry up, and less employment.

The report, released on Friday 7 December, eased worries that this spiral had already begun. But it did little to give assurance about the future. All it really indicates, say analysts, is that the US economy is not in a recession right now, which many feared about before.

The greatest concern continues to revolve around whether the real estate downturn and the sub-prime mortgage crisis will cascade and infect the broader economy. The report did little to allay these fears.

A year ago, the number of American jobs in financial services and construction was steady. But by the middle of this year, both sectors were shedding about 25,000 jobs a month. In October, they lost 50,000 jobs. In November, it was 75,000! This loss of high-paying jobs shows the economy is losing steam, is the general verdict.

Overall, the report reinforced a general downward slide in the labour market that has been unfolding for two years. In 2005, the economy generated an average of 212,000 jobs each month.

Last year, the pace slowed to 189,000. In the first 11 months of this year, the rate dropped to 118,000 a month. Yesterday''s report nudged the figure down even more. After deducting hiring by the government, the private sector added 64,000 jobs in November. Last year, the private sector was still creating 169,000 jobs a month.

Verdict? Analysts say it''s the best they could hope for; at least the bottom has not dropped out of the labour market.