United States jobs growth jumps in December

US jobs growth jumps in December

The Fed increased borrowing costs last month for the fourth time in 2018, but forecast fewer rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

Data out this week have fanned fears that the nine-year economic expansion is running out of steam.

"So when we see the January jobs number, it could be a big negative", said Hassett, even though those workers would be paid back wages once the government fully re-opened. "An upside surprise could increase market expectations for rate hikes in 2019, while a downside surprise could lead markets to price a higher probability that exceptional US growth is not immune from declining equity prices and slowing global growth".

There were also broad gains in hiring last month.

Thursday's report showed the number of claims workers made for longer than a week increased by 32,000 to 1,740,000 in the week ended December 22. And average hourly pay improved 3.2 percent from a year ago. The Dow Jones industrial average climbed roughly 450 points in morning trading, an increase of about 2 percent.

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.

Jobs in health care increased by 50,000 last month, with most of the employment centered around ambulatory care and hospitals. Powell is due to appear on a panel with his two predecessors about two hours after the report's release.

The U.S. central bank raised rates four times in 2018.

"The labor market is as strong as it's been since pre-crisis times", said Michael Gapen, chief US economist at Barclays Plc. In the latest signal that investors see little room for the Fed to lift rates any further, yields on 2-year U.S. Treasury notes US2YT=RR on Thursday dropped below the Fed's policy rate for the first time in more than a decade. That's key, at a time the tariff war with China has cast a shadow over USA manufacturing and the global outlook, one reason why investors were betting before Friday's numbers that the Federal Reserve would stay on hold or cut interest rates, rather than keep raising them.

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.

"Overall, the markets may have decided the Fed's work is done, but the economic data say otherwise", said Ashworth.

That figure includes the 2.88 million more Americans who are employed now than were employed in December of 2017.

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The Labor Department has not been affected by the partial shutdown of the U.S. government and will continue to publish economic data complied by its statistics agency, the Bureau of Labor Statistics.

Data releases from Census Bureau and Bureau of Economic Analysis have been suspended during the shutdown, which started on December 22 amid demands by Trump for $5 billion in funding for a wall on the U.S. -Mexico border. -China tariff war, softening manufacturing, a housing slowdown and a projected cooling in global growth.

A month earlier, wages grew 0.2 percent.

With the labor market viewed at being at or beyond full employment, the pace of job growth is slowing as employers struggle to find workers.

But the expected continuation of steady job growth suggests that such risks might be - for the moment, anyway - overblown.

Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees. Some economists believe that the resulting tightening in financial market conditions could discourage the Federal Reserve from further raising interest rates this year.

But there has been concern over how stable the economy is, with the current partial government shutdown coming to the forefront.

Hiring last month rose across all sectors.

Amherst Pierpont - 200,000 jobs, 3.6 percent unemployment, 3 percent annual wage growth. Economists polled by Reuters had forecast private payrolls advancing 178,000 last month following a previously reported 179,000 increase in November.

Professional and business services employment increased by 43,000 jobs last month and government payrolls rose 11,000.

Bloomberg Economics - 210,000 jobs, 3.6 percent unemployment, 3 percent annual wage growth.

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