December jobs report shows rising unemployment, unexpected job growth

Andrew Cummings
January 8, 2019

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 total number of jobs in the US rose by +312,000 in December, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). The unemployment rate rose to 3.9 percent, but that's because more people came off the sidelines to look for jobs, the Labor Department said Friday.

In December, private sector workers (excluding farmworkers) got an average 11-cent hourly raise, adding up to an average hourly pay of $27.48. 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 United States central bank would be "patient" in deciding on any further increases in the benchmark lending rates.

Analysts anticipated that unemployment would hold steady at 3.7 percent, the lowest number in almost 50 years, while forecasting the creation of 177,000 jobs, according to economists polled by Refinitiv (formerly Thomson Reuters). This marks the eighth consecutive month with positive job growth and puts trucking employment 2.5% higher than at this point past year.

Attributing the job growth to Trump's policies, the Labour Secretary Alexander Acosta said the American economy surpassed 150 million jobs for the first time ever.

"Friday's payrolls numbers suggest a healthier USA economy than some investors had anticipated", it said.

Job gains occurred in health care, food services and drinking places, construction, manufacturing, and retail, the bureau report said.

Manufacturing added 207,000 jobs in 2017.

"This is the 12th jobs report following the historic rewrite of our nation's tax code, and the trend remains the same: strong growth for America", the House Ways and Means Committee Ranking Member Kevin Brady said.

The roughly 380,000 federal workers who were furloughed in December were not included in the report because the government shutdown started after the data was collected.

The average monthly increase in US construction jobs in 2018 was +23,000, which was +12.0% higher than 2017's average monthly increase of +21,000. The wage number also was well above expectations of 3 percent on the year and 0.3 percent from November. It had been at a 50-year low of 3.7% for two of the last three months.

The economy grew at a 3.4 percent pace in the third quarter. "More importantly, this year of success for our workers needs to be built upon", he said. Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees. Manufacturing payrolls rose by 32,000 jobs in December. Employment in the leisure and hospitality industry increased by 306,000 jobs. Workers who have struggled with disproportionately high joblessness found more opportunities.

The large month-to-month gain in jobs in December understates the overall improvement, since there was also a substantial positive revision to prior data. Among health care sub-sectors, "home health care services" stood out with +13,000 jobs month-to-month.

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