Hicks: Jobs Report Can Ease Recession Worries

Daniel Fowler
January 7, 2019

There were also broad gains in hiring last month. In 2017, by comparison, manufacturing had added 207,000 jobs. For the past year, the American economy was averaging about 209,000 new jobs each month. 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 Labor Department says the unemployment rate rose slightly to 3.9 percent, but that reflected a surge in jobseekers- a positive for growth. The labour force participation rate - a measure of the total supply of employed people and those available and searching for work - rose to its highest level since September 2017 at 63.1 per cent of the working-age population.

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.

On Friday fed chairman Jerome Powell noted the strengths in the USA economy, like the jobs market, said the fed will remain flexible.

The reminder that while Wall Street may be ailing the real economy is chugging along was sure to delight Trump. Powell is due to appear on a panel with his two predecessors about two hours after the report's release.

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The Fed raised rates four times in 2018.

As a government shutdown continues and the stock market takes an nearly daily dive, none of this appears to be slowing down the US job market.

The markets have been turbulent amid concerns that the USA economy will be hurt by weakness in other countries. Even with fear of a global economic slump depressing stock markets, Friday, jobs report for December is expected to offer reassurance that the USA economy remains sturdy and on track to expand for a 10th straight year. 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.

The economy grew at a 3.4 percent pace in the third quarter. Monthly job growth around 120,000 is sufficient to keep the unemployment rate under 4%. Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees. The plunge in the stock market, combined with weakening manufacturing readings and concerns over the trade dispute with China, led some to believe that a recession is around the corner in 2019. The government shutdown, if it extends beyond next week, could weigh on January payrolls.

Within the transportation sector, the trucking industry performed relatively well by adding 2,900 workers to payrolls during the month. Courier and messenger employment is still over 9% higher than it was at this point past year and is one of the fastest growing industries in the entire economy. Hiring last month jumped in healthcare, bars and restaurants, construction and, notably, in manufacturing, especially for durable goods, fabricated metal products and computers and electronics - all sectors that complain of lower profits and lost sales due to global trade tensions. During the first 11 months of 2018, employers added 2.27 million jobs, or an average of 206,182 a month, according to the Labor Department.

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