The Labor Department released its official employment figures for the month of December this Friday. This is often a chance to get the latest picture on the American economy. The report noted that at least 312,000 jobs were added last month. This was the biggest monthly gain since February when 324,000 jobs were added. The monthly average for the last three months stands at 254,000. The report by the Labor Department also confirmed that the unemployment rate rose to 3.9% compared to the 3.7% reported in November.
In addition to this, the average hourly wage was up by 3.2% compared to the same period last year. The number of added jobs is relatively higher compared to earlier projections by Wall Street. Analysts argued that this is a good sign seeing that there has been a lot of uncertainty in Wall Street about the possibility of a recession. Overall, employers did manage to add more jobs this year compared to 2017. The monthly average reported for the whole year stands at 220,000 jobs.
However, analysts note that in 2017, the circumstances were unique. This was the year that Congress passed a comprehensive tax cut bill that gave the economy a much-needed boost. There are still concerns about whether the progress made so far will be maintained in the long run. It’s also clear that employers have continued to hire people even as trade tensions between the US and China engulf. The December numbers don’t account for workers furloughed during the ongoing government shutdown.
The positive numbers come in the backdrop of a torrid time in the stock market. US stocks have been shaky at best over the last few months but they did report some gains on Friday as soon as this report was released. The S&P 500, for instance, was up by 2% in the day’s trading. However, analysts argue that the job report is only a short-term factor when it comes to investor sentiment. Seeing that the markets have been facing a lot of challenges over the last few months, it will take more than one positive factor to improve sentiment. Nonetheless, the labor market report does show that fears among analysts that the US economy could be headed to a recession are overblown.
Many believe that the job report could indicate that the economy is entering a period of slow and steady growth. The unemployment rate is also at its lowest level in 50 years. Labor market participation is improving as people come in to take advantage of the higher wages. As for the wages, although they did stagnate for some time, there are a few signs that show that things could actually be picking up.
One concern though that still hovers above these positive job numbers is the slowed global economic growth. The Chinese economy, in particular, has been slowing and this is not expected to change in the near future. President Donald Trump is also engulfed in a trade war with the Asian country and this could have negative implications on the global economy in the long term.
