Hiring Surged in December, Employers Added 312,000 Jobs

U.S. Sees Exceptional Job Growth In December

Employers added a whopping 312,000 positions for the month, smashing economists' expectations, and wages rose steadily, gaining 3.2% for the year.

There was only one other month in 2018 with a greater surge in jobs creation, February at +324,000. The side effect was that the unemployment rate moved up to 3.9% from 3.7% in November. "This employment report suggests the USA economy still has considerable forward momentum".

The Bureau of Labor Statistics also amended previous reports to show that more jobs were added - a common move after last year's hurricanes scrambled the numbers, analysts said.

The mining industry excluding oil and gas exploration increased its employment by 900 to 192,100. It is expected to slow to around 150,000 per month this year as workers become more scarce. The monthly average employment increase was +220,000, which was an increase of +20.6% versus 2017's monthly average rise of +182,000.

Manufacturing payrolls increased by 32,000 jobs in December, but could surprise on the downside after a measure of factory employment fell last month. Hiring last month jumped in healthcare, bars and restaurants, construction and, notably, in manufacturing, especially for durable goods, fabricated metal products and computers and electronics - all sectors that complain of lower profits and lost sales due to global trade tensions.

USA stocks rallied on the employment report on Friday and extended gains after Powell's comments. If oil prices remain low, we expect hiring and investment in mining to stall.

Several sectors saw a pickup in hiring.

"So when we see the January jobs number, it could be a big negative", said Hassett, even though those workers would be paid back wages once the government fully re-opened. Economy-wide (excluding bosses), the pay hikes were +3.3% hourly and +3.0% weekly.

And businesses are still searching for more workers.

The nation's unemployment rate rose slightly to 3.9 percent last month, but that, too, was considered a positive sign, reflecting an increase in Americans beginning to look for work. On the goods side of the economy, both manufacturing and construction saw solid gains in employment in December, with each adding over 30,000 workers to payrolls. Among health care sub-sectors, "home health care services" stood out with +13,000 jobs month-to-month. Education added 24,000 jobs.

Much of this surprising uptick in new jobs has come from medium-sized businesses, according to ADP's National Employment Report for December. That lifted the annual increase in wages to 3.2 percent, matching October's gain, from 3.1 percent in November.

Statistics Canada's Labour Force Survey report for December speaks of total jobs north of the border creeping forward by only +9,000.

Stocks jumped Friday in response to the jobs figures.

For ease of comparison, all the series have been indexed with January 2010 as the base or starting point. It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.

Despite talk of an impending recession in 2020 that might put employers on edge, some economists have said the December jobs report indicates economic strength in the usa - at least in the us labor market.

Canada's unemployment rate in December stayed the same as in November, at 5.6%.

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