Job growth surges by 312000 in December

U.S. employers dramatically stepped up their hiring in December adding 312,000 jobs in an encouraging display of strength. | AP file

US 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.

Previous months also saw positive revisions, adding to the upbeat tone for the year. During 2018, over 2.6 million workers were added to payrolls in the USA economy.

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. The unemployment rate rose to 3.9% from 3.7% in November amid a jump in the number of people looking for work.

The economy added 2.6 million jobs and ended with a labor participation rate of 63.1%.

Don't miss it. Register today. Hicks says part of the job gains were especially strong in seasonal sectors such as retail, however manufacturing also added 32,000 jobs. The 3.2 per cent wage gains compared to 2017 also meant workers saw increased purchasing power as consumer inflation over the same period was a slower 2.2 per cent.

"Yes, the nation's unemployment rate rose to 3.9%, but for the best of reasons", said Mark Hamrick, Bankrate.com senior economic analyst.

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Canada hit a weak spot in total jobs creation from 2013 through 2015 but has since been mostly tracking the US path higher.

Within the transportation sector, the trucking industry performed relatively well by adding 2,900 workers to payrolls during the month. Such a low unemployment rate means that almost every American who wants to work, and is able to work, has snagged a job by now. For the past year, the American economy was averaging about 209,000 new jobs each month. It also serves as a useful reminder that the economy is still functioning fairly well despite some of the negatives that have emerged over the past couple of weeks. Citing rising interest rates that are beginning to impact the housing market, manufacturing surveys from Federal Reserve banks in Dallas, Philadelphia, and NY that were less than expected, and fears from stock market investors that the Federal Reserve may continue to push for interest rate increases to ward off inflation, some economists believe these factors could combine to lead the US economy into a tough situation. 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. With the labor market performing as well as it is, consumer fundamentals are going support growth for the near future.

The ripple effects from slower growth overseas could eventually hurt the US economy, David Dollar, a senior fellow at the Brookings Institution, told NPR's Scott Horsley. Employment figures are usually a lagging indicator, meaning that the economy will typically slow down first before hiring trends change.

Alberta shed 17,000 jobs in December, but achieved a decent result year-over-year, +22,000. The pace of hiring in the industry has outpaced the rest of the economy for several months now, which has helped to ease the capacity crunch from where it was earlier in the year.

Mr. Powell began his news conference last month with a disclaimer that could look prescient if the economy sputters this spring.

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