U.S. employers dramatically stepped up their hiring in December, adding 312,000 jobs in an encouraging display of strength for an economy in the midst of a trade war, slowing global growth and a partial shutdown of the federal government.
The Labor Department said Friday that the unemployment rate rose slightly to 3.9 percent, but that reflected a surge in jobseekers— a positive for growth.
Average hourly pay improved 3.2 percent from a year ago.
The health care, food services, construction and manufacturing sectors were the primary contributors to last month’s hiring.
The strong job gains suggest that the tumbling stock market has yet to depress expectations that the economy will expand for a 10th straight year. Still, growth is likely to slow as the stimulus from last year’s tax cuts wane.
The jolt in hiring offers a dose of reassurance after a tumultuous few months as the outlook from the financial markets has turned decidedly bleaker.
Major companies such as Apple say their sales are being jeopardized by the tariff-fueled trade war between the United States and China. Factory activity in China and the United States have both weakened, with the Institute for Supply Management’s U.S. manufacturing index on Thursday posting its steepest decline in a decade.
The government is about to enter its third week of a partial shutdown, with negotiations stalled over President Donald Trump’s insistence that Democrats agree on funding for a wall along the border with Mexico. And attacks by Trump on the Federal Reserve over its rate increases have raised doubts about Chairman Jay Powell’s status — a concern for both the markets and the economy.
But the expected continuation of steady job growth suggests that such risks might be — for the moment, anyway — overblown. Average hourly earnings are expected to have climbed 3 percent from a year ago, up from a year-over-year gain of 2.7 percent at the end of 2017.
Payroll processor ADP said Thursday that private businesses added a robust 271,000 jobs in December, a sign that companies expect decent growth to continue despite the overhang of risks.
And businesses are still searching for more workers. The employment site Glassdoor found that job postings have risen 17 percent in the past year to 6.7 million.
“We really don’t see any slowdown yet,” said Andrew Chamberlain, chief economist at Glassdoor.
Hiring has been unusually strong as the unemployment rate has fallen to 3.7 percent — a 49-year low — from 4.1 percent at the start of 2018. Economists estimate that it requires roughly 100,000 job gains each month to satisfy population growth and keep the unemployment rate at its current level.
But hiring has easily eclipsed that pace. During the first 11 months of 2018, employers added 2.27 million jobs, or an average of 206,182 a month, according to the Labor Department.
Source: The Associated Press