Upbeat employment report underscores U.S. economic strength

[rooster59]

Upbeat employment report underscores U.S. economic strength

By Lucia Mutikani

 

FILE PHOTO: Job seekers and recruiters gather at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida/File Photo

 

WASHINGTON (Reuters) - U.S. employers hired the most workers in 10 months in December while boosting wages, pointing to sustained strength in the economy that could ease fears of a sharp slowdown in growth.

 

The upbeat employment report from the Labor Department on Friday stood in stark contrast with reports this week showing Chinese factory activity contracting for the first time in 19 months in December and weak manufacturing across much of Europe.

 

Concerns about the U.S. economy heightened following surveys showing sharp declines in consumer confidence and manufacturing activity last month, which roiled financial markets. Both were seen as more red flags that the economic expansion, now in its ninth year and the second longest on record, is losing steam.

 

"The jump in payrolls in December would seem to make a mockery of market fears of an impending recession," said Paul Ashworth, chief economist at Capital Economics in Toronto. "This employment report suggests the U.S. economy still has considerable forward momentum."

 

Nonfarm payrolls surged by 312,000 jobs last month, the largest gain since February, as employment at construction and leisure and hospitality locations snapped back after being restrained by unseasonably cold temperatures in November.

 

Job gains were reported across all industries, with the exception of the information sector, which shed employment for the second straight month. Data for October and November were revised to show 58,000 more jobs added than previously reported.

 

The economy created 2.6 million jobs last year compared to 2.2 million in 2017.

 

Average hourly earnings rose 11 cents, or 0.4 percent, in December after gaining 0.2 percent in November. That lifted the annual increase in wages to 3.2 percent, matching October's rise, which was the largest in 9-1/2 years.

 

Wages advanced 3.1 percent on a year-on-year basis in November. Employers increased hours for workers, pushing the average workweek up to 34.5 hours from 34.4 hours in November.

 

The unemployment rate increased to 3.9 percent from near a 49-year low of 3.7 percent in November as a strong labor market pulled some 419,00 jobless Americans from the sidelines. Fewer workers worked part-time for economic reasons in December.

 

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose two-tenths of a percentage point to 63.1 percent, the highest level since September 2017.

 

The strong employment report likely keeps the Federal Reserve on course to continue raising interest rates this year, deepening its rift with Wall Street and President Donald Trump, who has chastised the Fed and its chairman, Jerome Powell, repeatedly for the rate increases.

 

Speaking at an American Economic Association event with former Fed chiefs Janet Yellen and Ben Bernanke on Friday, Powell sought to placate jittery financial markets. Powell said the U.S. central bank was "always prepared to shift the stance of policy and to shift it significantly" if necessary. He also said he would not resign if Trump asked him to so.

 

The Fed raised rates four times in 2018. The central bank last month forecast two rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

 

U.S. financial markets are projecting no rate hikes in 2019. 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.

 

U.S. stocks rallied on the employment report on Friday and extended gains after Powell's comments. The dollar <.DXY> surrendered earlier gains against a basket of currencies and U.S. Treasury yields rose.

 

BROAD EMPLOYMENT GAINS

 

"This should, at least for today, mute expectations that the Fed is off the table completely this year," said Omair Sharif, a senior economist at Societe Generale in New York.

 

The December jobs gain pushed total U.S. employment above 150 million jobs for the first time. 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 Dec. 22 amid demands by Trump for $5 billion in funding for a wall on the U.S.-Mexico border.

 

The robust labor market, especially strengthening wage growth, suggests the economy will continue to expand this year despite the ebb in consumer confidence, continued weakness in the housing market and cooling manufacturing activity.

 

"Strong job gains coupled with rising wages should act as a tailwind for consumption," said Michelle Meyer, chief economist at Bank of America Merrill Lynch in New York.

 

Growth forecasts for the fourth quarter are around a 2.6 percent annualized rate, with risks tilted to the downside amid the fading stimulus from the Trump administration's $1.5 trillion tax cut package, a trade war with China and policy uncertainty in Washington.

 

The economy grew at a 3.4 percent pace in the third quarter. It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population. Job growth averaged 220,000 per month in 2018. It is expected to slow to around 150,000 per month this year as workers become more scarce.

 

Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees. The government shutdown, if it extends beyond next week, could weigh on January payrolls.

 

Employment at construction sites rebounded last month, with companies hiring 38,000 employees after adding no workers in November. Manufacturing payrolls rose by 32,000 jobs in December. Retailers hired 23,800 more workers.

 

Professional and business services employment increased by 43,000 jobs last month and government payrolls rose 11,000. Employment in the leisure and hospitality sector increased by 55,000 jobs. The health and education sector added 82,000 positions.

 

(GRAPHIC: Citigroup economic surprise index -

 

 

-- © Copyright Reuters 2019-01-05

[Watchful]

Of particular note is the job growth in manufacturing. When you look at 2018 in total, the growth in manufacturing jobs was the largest in the last 21 years.

 

This is a very healthy sign as manufacturing jobs generally pay more than hospitality and food service. 

[Tug]

Does that include all the people thrown out of work because of the trump shut down?

[Cryingdick]

The speech Powell made kissing the markets ass was a thing of beauty. What an exciting day on the market today! this week has been a joy trading into a market moving up after the past two months. It is really hard finding anybody to do any work right now. Especially skilled labor. 

 

Smashing jobs reports, low signs of inflation and no interest rate hikes for the foreseeable future. This should be a good week ahead. 

[pedro01]

"Those jobs are never coming back"..... Obama

 

"Oh, yes they are" - MAGA

[Srikcir]

5 hours ago, rooster59 said:

Upbeat employment report underscores U.S. economic strength

In contrast to a strong economy that Trump claims as his own, he denies 800,000 federal employees of a 2.1% pay raise and a "locality pay increase" for 2019 saying "the federal budget couldn't support it." But the military will get its 2.6% pay raise. https://edition.cnn.com/2018/12/29/politics/trump-executive-order-federal-workers-pay-freeze/index.html

But that's okay.

He also says that "most of the people not getting paid are Democrats."

https://www.nbcnews.com/politics/donald-trump/trump-now-claims-most-furloughed-workers-are-democrats-n952236

In any event expect the federal reserve to continue to raise interest rates in 2019.

https://www.cnbc.com/2018/11/27/el-erian-the-fed-will-have-to-go-through-with-four-rate-hikes.html

That will certainly thrill Trump.

[attrayant]

3 hours ago, pedro01 said:

"Those jobs are never coming back"..... Obama

 

"Oh, yes they are" - MAGA

 

Good job finding something - anything - and applying it in a totally different context.  Obama was referring to jobs lost  - mainly in the rust belt - due to advances in automation.  Those are the jobs that Obama said were never coming back.

[mikebike]

7 hours ago, Watchful said:

Of particular note is the job growth in manufacturing. When you look at 2018 in total, the growth in manufacturing jobs was the largest in the last 21 years.

 

This is a very healthy sign as manufacturing jobs generally pay more than hospitality and food service. 

Have we forgotten the 15,000 GM workers and corollary local jobs which are gone in 2019?

 

And that Ford's plans for 2019/2020 include something similar?

 

Winning again.

[mcambl61]

1 hour ago, attrayant said:

 

Good job finding something - anything - and applying it in a totally different context.  Obama was referring to jobs lost  - mainly in the rust belt - due to advances in automation.  Those are the jobs that Obama said were never coming back.

yeah, sure he was. how insightful 

Edited January 5, 2019 by mcambl61

[mcambl61]

3 hours ago, Srikcir said:

In contrast to a strong economy that Trump claims as his own

well now, is there anything short of impeachment and imprisonment that will satisfy?

because orange man bad, economy Obama good. 

[attrayant]

3 minutes ago, mcambl61 said:

yeah, sure he was. how insightful 

 

Eat facts: (Warning - reading this may severely damage your ignorance)

 

Trump promised to bring those jobs back, a sentiment that resonated powerfully with the electorate. The problem is—as we’ve talked about previously—that at least 80–90% of manufacturing jobs were lost not to companies moving factories to China or Mexico but to increased automation.

Those Jobs Are Never “Coming Back”

 

And here's the video of him saying these words in a town hall meeting, just in case you think Forbes is misinterpreting: Obama: Some jobs 'are just not going to come back'

 

Warning: Obama uses adult-sized words, and you need to listen to the surrounding context to fully understand.  If you have any trouble understanding, ask an adult to help you.

[Peasandmash]

I'm looking forward to dividend season ????

 

Thank you President Donald Trump leader of the free world!

 

President Trump is making America Great Again and we're loving it ????

 

$$$ Six more years $$$ Six more years $$$ Six more years $$$

[candide]

6 hours ago, pedro01 said:

"Those jobs are never coming back"..... Obama

 

"Oh, yes they are" - MAGA

Obama was referring to the large mass of jobs lost years ago. You know the big mountain culminating in 1979, not the small hill starting in 2010.

 

[mcambl61]

2 hours ago, attrayant said:

 

Eat facts: (Warning - reading this may severely damage your ignorance)

 

Trump promised to bring those jobs back, a sentiment that resonated powerfully with the electorate. The problem is—as we’ve talked about previously—that at least 80–90% of manufacturing jobs were lost not to companies moving factories to China or Mexico but to increased automation.

 Those Jobs Are Never “Coming Back”

 

And here's the video of him saying these words in a town hall meeting, just in case you think Forbes is misinterpreting: Obama: Some jobs 'are just not going to come back'

 

Warning: Obama uses adult-sized words, and you need to listen to the surrounding context to fully understand.  If you have any trouble understanding, ask an adult to help you.

thanks for the condescension and arrogance, and the Obama fan boy thrill up your leg.

 

however, I will take this trend any day over the Obama stagnation:

 

Manufacturing jobs are growing at a 714% faster clip under Trump than over a similar time under Obama , and;
Under Obama, federal state and local government employment grew 6 times faster than did manufacturing jobs, while under Trump, that ratio has been reversed, with manufacturing jobs growing 5 times faster than government jobs.

 

 

https://www.forbes.com/sites/chuckdevore/2019/01/04/312000-jobs-added-in-december-manufacturing-growing-714-faster-under-trump-than-obama/#752c7d035b50

 

 

 but you keep up the pseudo intellectual facade, its a liberal right to feel superior in your mind

[simple1]

21 minutes ago, mcambl61 said:

thanks for the condescension and arrogance, and the Obama fan boy thrill up your leg.

 

however, I will take this trend any day over the Obama stagnation:

 

Manufacturing jobs are growing at a 714% faster clip under Trump than over a similar time under Obama , and;
Under Obama, federal state and local government employment grew 6 times faster than did manufacturing jobs, while under Trump, that ratio has been reversed, with manufacturing jobs growing 5 times faster than government jobs.

 

 

https://www.forbes.com/sites/chuckdevore/2019/01/04/312000-jobs-added-in-december-manufacturing-growing-714-faster-under-trump-than-obama/#752c7d035b50

 

 

 but you keep up the pseudo intellectual facade, its a liberal right to feel superior in your mind

Swings and roundabouts. As the OP states manufacturing jobs are cooling, plus the quote below indicating possible trend for 2019...

 

 Institute for Supply Management’s most recent manufacturing index, while still expansionary at 54.1 (figures of 50 and higher indicate expansion), fell by 5.2 points, the largest month-to-month drop since the financial crisis.

 

https://www.nbcnews.com/business/economy/trump-touts-thriving-steel-industry-manufacturing-insiders-disagree-n954866

 

A bit out of date, but comprehensive analysis of the economy under trump versus Obama, though Obama had to recover, successfully, from the GFS.

 

https://www.factcheck.org/2018/10/trumps-numbers-october-2018-update/

[candide]

2 hours ago, mcambl61 said:

thanks for the condescension and arrogance, and the Obama fan boy thrill up your leg.

 

however, I will take this trend any day over the Obama stagnation:

 

Manufacturing jobs are growing at a 714% faster clip under Trump than over a similar time under Obama , and;
Under Obama, federal state and local government employment grew 6 times faster than did manufacturing jobs, while under Trump, that ratio has been reversed, with manufacturing jobs growing 5 times faster than government jobs.

 

 

https://www.forbes.com/sites/chuckdevore/2019/01/04/312000-jobs-added-in-december-manufacturing-growing-714-faster-under-trump-than-obama/#752c7d035b50

 

 

 but you keep up the pseudo intellectual facade, its a liberal right to feel superior in your mind

What the author of this contribution (from the conservative TPPF) forgets to mention is that Trump's tax cuts have been financed by increasing budget deficit and public debt. He basically has bought extra growth with extra deficit and debt.

[StreetCowboy]

You can only really judge a president from what he leaves for his successor

[StreetCowboy]

Is Trump going to be the first president to use Keynsian economics to buy his way out of prosperity?