U.S. employers hired the most workers in 10 months in December while boosting wages, pointing to sustained strength in the economy. 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.
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.
“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.”
The jobless rate rose for the right reason as 419,000 new workers entered the workforce and the labor force participation rate increased to 63.1 percent. The participation level was up 0.2 percentage points from November and 0.4 percentage points compared with a year earlier.
In addition to the big job gains, wages jumped 3.2 percent from a year ago and 0.4 percent over the previous month. The year-over-year increase is tied with October for the best since April 2009. The average work week rose 0.1 hour to 34.5 hours.
The unemployment rate came in at a low 3.9%.
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.
Health care led the way in new jobs, adding 50,000 for the month thanks to 38,000 new positions in ambulatory services and 7,000 more in hospitals. The industry saw a boom of 346,000 for the year, compared with a 284,000 gain the year before.
Restaurants and bars added 41,000 to the close the year with a 235,000 gain, down from 261,000 in 2017.
Construction also was one of the big gainers despite a slumping housing market. The industry added 38,000 jobs in December, bringing the annual total to 280,000, a 12 percent gain from 2017’s 250,000.
Manufacturing also tuned in a solid 32,000 gain for the month, with the bulk of the growth coming from the 19,000 positions added in the key durable goods sector. The sector also saw a surge in 2018, with the 284,000 new positions representing a 37 percent rise from the previous year.
- Metro Voice and wire services