312,000 jobs added in December; unemployment inches higher

08 January, 2019, 03:41 | Author: Eric Barnett
  • US jobs growth jumps in December

A third report from the Labor Department showed initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 231,000 for the week ended december 29.

New factory jobs in December meant manufacturing ended 2018 with the most jobs added in one year.

"We remain constructive on the U.S. labor market at the start of 2019", said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The dollar shot higher after the numbers were released.

The US economy created many more jobs than expected in December, according to the latest government data.

Depending on how long it lasts, the shutdown "could be a big negative" in next month's jobsreport, which will reflect January employment, Kevin Hassett, a top economic adviser to President Trump, said Thursday.

"Incorporating revisions for October and November, which increased payrolls by 58,000, monthly job gains averaged 254,000 over the past 3 months", said William Wiatrowski, acting commissioner of the Bureau of Labor Statistics. The economy created 2.6 million jobs past year compared to 2.2 million in 2017.

Average hourly pay improved 3.2 percent from a year ago, up from average wage growth of 2.7 percent at the end of 2017.

Overall unemployment increased by 0.2 points to 3.9 percent in December, with 419,000 Americans out of work. The average workweek increased to 34.5 hours in December from 34.4 hours in November.

Economists have forecast that the Labor Department will report that employers added a solid 180,000 jobs last month and that the unemployment rate stayed at a five-decade low of 3.7 per cent, according to the financial data firm FactSet.


The unemployment rate rose to 3.9% as more people were looking for work. And attacks by Trump on the Federal Reserve over its rate increases have raised doubts about Chairman Jerome Powell's status - a concern for both the markets and the economy. Powell is due to appear on a panel with his two predecessors about two hours after the report's release. Still, growth is likely to slow as the stimulus from last year's tax cuts wane. However, the stock market will have to weigh whether the strong job growth encourages the Fed to hike rates in 2019 more frequently than investors had previously anticipated.

On Thursday, a gauge of factory activity in the U.S. fell by the most in a decade.

US stocks rallied on the employment report on Friday and extended gains after Powell's comments.

The ripple effects from slower growth overseas could eventually hurt the USA economy, David Dollar, a senior fellow at the Brookings Institution, told NPR's Scott Horsley.

"Markets will probably be miserable no matter what the outcome", said Dan North, chief economist at Euler Hermes North America in Baltimore.

The Labor Department has not been affected by the partial shutdown of the U.S. government and will continue to publish economic data complied by its statistics agency, the Bureau of Labor Statistics. Even with fear of a global economic slump depressing stock markets, Friday, Jan. 4, 2019 jobs report for December is expected to offer reassurance that the US economy remains sturdy and on track to expand for a 10th straight year.

It is expected to slow to around 150,000 per month this year as workers become more scarce.

There are concerns that tightening financial market conditions because of the steep stock market selloff could hurt hiring.

The big unknown is the partial federal government shutdown.

A large portion of the growth occurred in health care, construction, food services, retail trade and manufacturing.

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