In December, U.S. businesses generated 312,000 jobs, an encouraging sign of strength for an economy in the midst of a trade war, slowing global growth and a partial closure of the federal government.
The Department of Labor reported that the unemployment rate rose slightly to 3.9%, but that reflected an increase in job seekers, i.e., there was positive growth in hiring. While the average hourly wage improved 3.2% over the previous year.
The health care, food service, construction and manufacturing sectors were the main contributors to last month’s hiring, he said.
Economists estimate that it takes approximately 100,000 job gains each month to meet population growth and maintain the unemployment rate at its current level.
December’s hiring easily overshadowed that pace, so the unemployment rate should decline in the coming months. In 2018, employers added 2.6 million jobs, or an average of nearly 217,000 a month, according to the Department of Labor.
Strong employment gains suggest that the falling stock market has not yet lowered expectations that the economy will expand for the tenth consecutive year. However, growth is likely to slow as the stimulus from last year’s tax cuts diminishes, according to analysts.
Continued steady job growth offers reassurance after troubled months, and suggests that the risks presented to date could, for the time being, be exaggerated. These include:
Major companies, such as Apple, say their sales are in jeopardy from the U.S.-China tariff-driven trade war, while factory activity in both countries has weakened.
In addition, the government is about to enter its third week of partial closure, with negotiations stalled by President Donald Trump’s insistence that Democrats agree to fund a wall along the border with Mexico.