U.S. employers added a stellar 312,000 jobs in December

U.S. employers dramatically stepped up their hiring in December, adding 312,000 jobs in an encouraging display of strength for an economy in the midst of a trade war, slowing global growth and a partial shutdown of the federal government.

The Labor Department said Friday that the unemployment rate rose slightly to 3.9 per cent, but that reflected a surge in jobseekersa positive for growth. Average hourly pay improved 3.2 per cent from a year ago, up from average wage growth of 2.7 per cent at the end of 2017.

The jolt in hiring offers a dose of reassurance after a tumultuous few months as the outlook from the financial markets has turned decidedly bleaker. 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.

“The labour market is very strong even though the economy appears to be slowing,” said Eric Winograd, senior U.S. economist at the investment management firm AllianceBernstein. “Those two things cannot coexist for very long. Either weakening demand will lead firms to dial back the pace of hiring or the robust pace of hiring will lead firms to ramp back up production.” Stocks jumped Friday in response to the jobs figures. The Dow Jones industrial average climbed roughly 450 points in morning trading, an increase of about 2 per cent.

But in recent weeks, financial markets have been increasingly worried about the path of economic growth this year. Major companies such as Apple say their sales are being jeopardized by the tariff-fueled trade war between the United States and China.

Factory activity in China and the United States have both weakened, with the Institute for Supply Management’s U.S. manufacturing index on Thursday posting its steepest decline in a decade.