US job creation rocketed higher last month, a jolt of unexpected good news for President Donald Trump as his economic agenda comes under increasing strain.With an unexpectedly strong finish to 2018, the blowout US jobs numbers were a reminder that the world's largest economy remains in good health for the moment - sharply contrasting with gloom on global financial markets in recent weeks.
Fears over a slowing world economy last month caused stock prices to tumble and confidence waned among corporations who foresee dwindling demand and weakening sales in 2019. But the December jobs news helped prompt a rebound on Wall Street, with all three major indices rallying after Thursday's rout.
Employers added a whopping 312,000 net new positions for the month, smashing economists' expectations, and wages rose steadily, gaining 3.2 percent for the year. The unemployment rate ticked up by two tenths of a point to 3.9 percent but mostly because the labor force grew as more workers joined the job hunt, according to the closely-watched report.
And net job gains in October and November were revised up a combined 58,000, the Labor Department said. Job creation last year rose to a monthly average of 220,000 positions, far higher than the 182,000 recorded in 2017 but lower than 2014 and 2015, a sign that 2018 was boosted by unusual tax cuts and fiscal stimulus.The fresh signal that although Wall Street may be ailing the real economy is chugging along was sure to delight Trump.
However, the new evidence of a strong economy could add to the case for the Federal Reserve to continue to raise interest rates this year, something Trump has aggressively and publicly complained about. Forecasts from Fed officials last month indicated they expect just two rate hikes in 2019 amid signs of weakness, rather than three. Jim O'Sullivan of High Frequency Economics said.
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