Average hourly pay improved 3.2 percent from a year ago, up from average wage growth of 2.7 percent at the end of 2017. Fears over a slowing world economy last month caused stock prices to tumble and confidence waned among corporations who foresee dwindling demand and weakening sales in 2019.
Data releases from Census Bureau and Bureau of Economic Analysis have been suspended during the shutdown, which started on December 22 amid demands by President Donald Trump for $5 billion in border wall funding. Job creation past year rose to a monthly average of 220,000 positions, far higher than the 182,000 recorded in 2017 but lower than 2014 and 2015, a sign that 2018 was boosted by unusual tax cuts and fiscal stimulus. Job growth at this pace is a sign that the economy will continue to expand for a 10th straight year, even if overall growth slows somewhat because of the waning stimulus from President Donald Trump's tax cuts. Economists estimate that it requires roughly 100,000 job gains each month to satisfy population growth and keep the unemployment rate at its current level.
Stocks surged on the news, along with word that the US and China will hold trade talks next week and comments from Federal Reserve Chairman Jerome Powell that the USA central bank will be flexible in judging whether to raise interest rates.
"This jobs report will signal to the Federal Reserve that continued monetary tightening is appropriate, and that the USA labor market remains a bright spot in an otherwise troubled economic environment". Apple CEO Tim Cook said China's growth was hurt by "rising trade tensions with the United States".
Mr. Powell began his news conference last month with a disclaimer that could look prescient if the economy sputters this spring.
Data for October and November were revised to show 58,000 more jobs added than previously reported.
The expectation of continued strength in hiring would contrast with the chaos of the stock market, a raging trade war, a partial shutdown of the government and the perception of growing risks for the economy. In December, retail employment rose by 24,000 positions. The next GDP report, for the fourth quarter, is due January 30. Rising interest rates?However, the new evidence of a strong economy could add to the case for the Federal Reserve to continue to raise interest rates this year, something Trump has aggressively and publicly complained about.
US financial markets are projecting no rate hikes in 2019. The Dow suffered its worst December decline since the middle of the Great Depression in 1931 as surveys of economists and business leaders suggested the United States could be in a recession by 2020. "Eventually, job growth is going to start slowing down". The Fed's December move lifted its benchmark short-term rate by a quarter-percentage point to a range between 2.25% and 2.5%.
The jolt in hiring offered a dose of reassurance after a tumultuous few months on the financial markets. 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. In 2017, by comparison, manufacturing had added 207,000 jobs.
By industry sector, the largest revisions to November's jobs statistics came from "retail" (+18,000), "government" (+16,000) and "leisure and hospitality" (+14,000).