US adds 312,000 jobs in December, far surpassing expectations


The US added 312,000 jobs in December, a huge rise well above forecasts that came amid volatile stock markets, a government shutdown and signs the economy is slowing.

The news, and signals that the Federal Reserve may slow its policy of raising interest rates, triggered a stock market rally with the Dow Jones Industrial Average closing up over 740 points, 3.3%.

The latest figures from the labour department, released on Friday, showed that the unemployment rate had risen to 3.9% from 3.7%, but even that figure appeared to highlight the strength of the jobs market. The rise came as more people entered the job market looking for work.

The figures were cheered by president Donald Trump. “GREAT JOBS NUMBERS JUST ANNOUNCED!” he wrote on Twitter.

Economists had been expecting the US to add about 180,000 new jobs in December, up from November’s 155,000 jobs.

The US has now added jobs for 99 consecutive months – the longest streak of job creation since records began. Numbers for November and October were also revised up by a total of 58,000. The economy added 2.64m jobs over 2018, the third best year for job growth since the recession a decade ago.

Sign up for the new US morning briefing

Over the year, employers added an average of 220,000 jobs a month in 2018, the best growth since 2015.

There was good news for workers on wages, too. Average hourly earnings climbed by a seasonally adjusted 0.4% from November and were up 3.2% from a year earlier, their largest gain since 2008.

Wages have lagged behind the recovery in the jobs market since the end of the last recession. But while the latest rise will be a boon to workers it will also stoke fears of further interest rate rises this year – a scenario that has rattled stock markets in recent months.

READ  BOJ board debated pros, cons of more easing at March meeting - minutes

But US stock markets rose on the jobs report with investors seeing the strong numbers as evidence that the US economy is still expanding. Markets were further cheered by comments from Fed chair Jerome Powell who signaled that the central bank was willing to stop raising rates if there were signs of a slowdown.

“We will be prepared to adjust policy quickly and flexibly and use all of our tools to support the economy should that be appropriate,” Powell told a conference in Atlanta. the Fed chair – who has been harshly criticized by Trump – also said he would not resign even if the president asked him to. The possible – unprecedented – ousting of the Fed chair had also unnerved investors.

On Wednesday, ADP, the US’s largest payroll supplier, said private sector employers added 271,000 jobs in December, the largest gain in almost two years. That rise came despite the trade war between the US and China and months of losses on the US stock markets.

Mark Zandi, chief economist of Moody’s Analytics, which helps compile ADP’s report, said: “Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war. Favorable December weather also helped lift the job market. At the current pace of job growth, low unemployment will get even lower.”



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here