Even with fear of a global economic slump depressing stock markets, Friday, Jan. 4, 2019 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.
The unemployment rate rose from 3.7 percent to 3.9 percent because more people were looking for jobs in December.
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 Fed will be flexible in judging whether to raise interest rates further.
"There is no preset path for policy and particularly with the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves", Powell said at the American Economic Association's annual meeting in Atlanta.
USA stocks extended losses on the weak ISM survey, with the Dow Jones Industrial Average falling more than 600 points at one point.
Don't see the graphic above? It said while consumption continued to strengthen, with production and employment still expanding, this was "at much lower levels compared to prior periods". Average earnings climbed to $27.48 an hour.
Hiring last month rose across all sectors.
Job gains were widespread, with construction, manufacturing, health care and leisure and hospitality all posting gains of more than 30,000 jobs.
US employers went on a hiring spree in December, adding a surprising 312,000 jobs and providing a dose of reassurance about the economy after a turbulent few months on Wall Street. That boosted job gains to an average 254,000 per month over the last three months.
USA financial markets are projecting no rate hikes in 2019.
This week, Apple cut its revenue estimates by billions of dollars, primarily because of weaker-than-expected iPhone sales in China due to that country's economic slowdown. The White House's protectionism has lead to a trade war with China and tit-for-tat tariffs with other trading partners, including the European Union, Canada and Mexico. The December report will include annual revisions to household survey data from which the unemployment rate is calculated, going back five years. The economy created 2.6 million jobs past year compared to 2.2 million in 2017. "And then, of course, that affects the whole world".
Stocks jumped Friday in response to the jobs figures.
The ISM's new orders sub-index plunged 11 points to 51.1 last month, the lowest reading since August 2016.
But the expected continuation of steady job growth suggests that such risks might be - for the moment, anyway - overblown.
The ADP report has a spotty record predicting the private-payrolls component of the government's employment report and last month's surge probably exaggerates the strength of the labor market because of a seasonal quirk.
There were also broad gains in hiring last month. But Hassett emphasized that the hundreds of thousands of furloughed federal workers will eventually receive back pay, diminishing the shutdown's negative economic impact.
"Yes, the nation's unemployment rate rose to 3.9%, but for the best of reasons", said Mark Hamrick, Bankrate.com senior economic analyst. "What we don't know is how many more acts there are yet to come".