Upbeat employment report underscores U.S. economic strength

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Democrats Try to Spin Massive Jobs Number as Bad News Alex Wong Getty4 Jan 2019

The strength in job growth in December did not translate to the transportation and logistics sector, however, which was weighed down by job losses among parcel companies.

The U.S. Bureau of Labor Statistics says the economy added 312,000 jobs in December, with nearly the same number of additional workers entering the labor force.

A separate household survey released by BLS shows that although the unemployment rate increased by 0.2 percentage points (p.p.) to 3.9 percent in December, it went up for the right reasons: more workers are coming off the sidelines and looking for work, signaling that the US economy continues to hum along. In the past 12 months, average hourly earnings have only increased 84 cents, or 3.2 percent, and that doesn't even take inflation into account.

The Dow Jones Industrial Average rose 600 points as total non-farm payroll employment increased by 312,000 in December, well above consensus estimates of 177,000 jobs created.

The positive jobs report was welcome news to Americans concerned about more interest rate hikes, the Trump administration's trade war with China, the government shutdown and a slowing global economy.

But the expected continuation of steady job growth suggests that such risks might be - for the moment, anyway - overblown. "This employment report suggests the US economy still has considerable forward momentum". For the year, the trucking industry added 36,600 jobs in 2018, up from 9,400 added in 2017 and is the best year for hiring within trucking since the 50,400 jobs added in 2014.

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.

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380,000 furloughed government workers were not factored into the report, as the numbers were collected before the partial government shutdown began.

Depending on how long it lasts, the shutdown "could be a big negative" in next month's jobsreport, which will reflect January employment, Kevin Hassett, a top economic adviser to President Trump, said Thursday.

The Fed raised rates four times in 2018.

Data released this week showed a key manufacturing mark hitting a two-year low and mortgage volume at its lowest in 18 years.

Last month, stakeholders also predicted that job growth had reached its peak with November's addition of 155,000 jobs (revised now to 176,000) marking the start of growth slow. The comparable increases across the whole economy, both hourly and weekly, were +3.2%. Furthermore, this growth was consistently strong throughout the year; the economy has added over 100,000 jobs every month in 2018, just the second time since 2000 that this has occurred for a full calendar year. Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees. Restaurants and bars added 41,000 jobs.

Builders added 38,000 construction jobs, while manufacturers increased their payrolls by 32,000 workers. Retailers hired 23,800 more workers. The professional and business services (583,000) and education and health services (517,000) industries produced over half-a-million jobs each.

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