December Jobs Report Assuages Investors

December Jobs Report Assuages Investors

December Jobs Report Assuages Investors

Employers added 312,000 jobs to the U.S. economy in December - almost double the 178,000 new positions economists had expected, according to the latest jobs report from the Bureau of Labor Statistics.

Meanwhile, the unemployment rate jumped to 3.9 percent - the highest rate since August - as more people felt confident enough to quit their jobs and look for new ones.

As the stock market continues its rollercoaster ride, a Ball State University economist says the December jobs report will do a lot to ease recession worries.

The economy needs to add 80,000 jobs a month just to maintain current staffing levels, said Joseph Brusuelas, chief economist at RSM, an global consulting firm. The Dow Jones industrial average shot up 747 points, or 3.3 percent.

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The unemployment rate rose from its sustained 49-year low of 3.7% to 3.9% in December, and the number of unemployed people increased by 276,000 to 6.3 million, the report said.

Wage growth also picked up. The rally kicked into high gear and the Dow Jones Industrial Average ended with a posting a 3.3 per cent gain, also helped by Federal Reserve Chairman Jerome Powell who said the USA central bank would be "patient" in deciding on any further increases in the benchmark lending rates.

For "hard hat" workers excluding supervisory personnel, the latest year-over-year compensation boosts were even more robust, +4.2% hourly and +4.5% weekly.

Within the transportation sector, the trucking industry performed relatively well by adding 2,900 workers to payrolls during the month. The growth occurred in health care (+50,000), food services and drinking places (+41,000), construction (+38,000), manufacturing (+32,000) and retail trade (+24,000). This marks the eighth consecutive month with positive job growth and puts trucking employment 2.5% higher than at this point previous year. Forecasts from Fed officials last month indicated they expect just two rate hikes in 2019 amid signs of weakness, rather than three.

USA financial markets are projecting no rate hikes in 2019.

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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. "That's a deal we'll take if more people are participating in the workforce". "And then, of course, that affects the whole world".

Following strong jobs data, major U.S. stock indexes opened higher with the Dow industrials recording more than 300 points, The wall Street Journal reported.

Still, consumer confidence slid in December, the Conference Board said. The jobless rate dropped to 3.7 percent in September - the lowest since 1969. Trade tensions with China and other countries could accelerate this slowdown, since President Trump's tariffs are raising the cost of doing business worldwide. The ISM manufacturing index fell 5.2 percentage points in December and an index measuring new orders tumbled 11 percentage points. This far exceeded consensus estimates of a gain of 184,000 and is the strongest monthly gain since the 324,000 jobs added in February of this year.

Kevin Hassett, one of Trump's economic advisers, predicted that if it continued, the current government shutdown would push those job numbers down to a lower level in January.

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