GOOD ENOUGH!
Stocks climb even as job growth trails outlook
US job growth in December came in weaker than expected — but investors cheered nonetheless, focusing on the unemployment rate holding at 4.1 percent, a 17-year low.
Nonfarm payrolls added 148,000 jobs last month – below the 190,000 expected by economists — yet strong enough to bring employment gains for 2017 to 2.1 million, the Labor Department’s Bureau of Labor Statistics said on Friday.
The annual gain marked the seventh straight year of job increases in excess of 2 million, reinforcing investor belief that the US continues to benefit from a Goldilocks economy: not too hot and not too cold.
“Even as much of the country shivers through the deep freeze, we can take some solace that the US economy continues to be more than just lukewarm following two straight quarters of 3 percent- plus growth,” said Mark Hamrick, Bankrate.com’s senior economic analyst.
Stock markets reacted by soaring to new highs, with the Dow rising 220.74 points, to 25,295.87. The S&P 500 gained 19.16, to 2,743.15, and the Nasdaq rose 58.64, to 7,136.56.
“The first year of the Trump administration, coupled with the end years of the Obama administration, will go down on record as one of the greatest periods of job growth in recent decades,” Joseph Foudy, a business professor at New York University, told The Post.
Foudy added that wage growth remained “muted but still positive,” referring to December’s 9-cent boost in average hourly earnings. The gain lifted the year’s wage in- crease to 65 cents, or 2.5 percent, and the average hourly wage to $26.63.
The modest growth “will give the Fed leeway on rates for the first half of next year,” Foudy said of expectations for the central bank to raise interest rates three times next year.
But should the jobless rate continue its fall in 2018 — conceivably dropping to 3.5 percent — economists predicted the resulting demand for workers would spur faster wage growth. That, in turn, could induce the Fed to push through four interest-rate hikes next year.
The BLS also revised downward by 9,000 the 472,000 jobs originally reported for October and November. Employment surged in those two months after back-to-back hurricanes in September stymied job formation.
Merrill Lynch’s econom- ics team noted that December’s job gains were not spread evenly by sector: The goods-producing side of the economy, which includes manufacturing and construction, continued to hire at a brisk pace, while the service-providing sectors, especially retail, indicated unexpected weakness.
“It’s possible new holiday shopping patterns are changing the seasonal hiring patterns,” the team led by Joseph Song wrote in a report.
With the 4.1 percent jobless rate at the lowest level since December 2000 for three straight months, hiring became more inclusive.
Unemployment among blacks fell to 6.8 percent — its lowest level in 44 years — and to a near-record low of 4.9 percent for Hispanics.
The unemployment rate was 3.7 percent for whites and 2.5 percent for Asians.