Report points to strong economy
Employers ended the year with a hiring spree, adding 312K jobs.
— U.S. employers dramatically stepped up 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 government shutdown.
The Labor Department said Friday that the unemployment rate rose slightly to 3.9 percent, but that reflected a surge in job seekers — a positive for growth.
Average hourly pay improved 3.2 percent from a year ago, up from 2.7 percent at the end of 2017.
The jolt in hiring offered a dose of reassurance after a tumultuous few months on the financial markets.
Stocks surged on the news, along with word that the U.S. and China will hold trade talks beginning Monday in Beijing and comments from Federal Reserve Chairman Jerome Powell that the U.S. central bank will be flexible in judging whether to raise interest rates.
The governments of the United States and China have expressed interest in a settlement but have given no indication that their stances have shifted. After several tit-for-tat tariff increases last year, Presidents Donald Trump and Xi Jinping agreed Dec. 1 to postpone further hikes.
Powell further cheered stock market investors Friday, telling a conference of economists in Atlanta that he will not resign if asked to do so by Trump, who has complained that the Fed has pushed rates higher and caused the stock market to decline despite the fact that there is no evidence that inflation was getting out of control.
“We are always prepared to shift the stance of policy and to shift it significantly if necessary” to meet the goals of maximum employment and stable prices, Powell said.
The S&P 500 index climbed 84.05 points, or 3.4 percent, to 2,531.94. The Dow rose 747 points, or 3.3 percent, to 23,433.16.
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 Trump’s tax cuts.
“The labor 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.”
Trump called the job growth “GREAT” on Twitter. But Kevin Hassett, chairman of the White House Council of Economic Advisers, told reporters on Thursday that the next jobs report for January could be weak if the government shutdown continues. HunWASHINGTON dreds of thousands of government employees put out of work would lower the job totals.
“So when we see the January jobs number, it could be a big negative,” Hassett said.
The health care, food services, construction and manufacturing sectors were the primary contributors to last month’s hiring.
Health care and education services added 82,000 jobs, the biggest jump since February 2012. Restaurants and drinking places posted a net gain of 40,700 jobs. Builders added 38,000 construction jobs, while manufacturers increased their payrolls by 32,000 workers.
Businesses are still searching for more workers.
Fresh Coat Painters, based in Cincinnati, plans to nearly double the 300 employees who paint homes and businesses as it expands this year across this country. The franchiser is also launching an apprenticeship program to attract workers, in addition to providing higher pay and benefits.
Tara Riley, president of Fresh Coat, said that franchise owners are having to actively search for workers instead of simply posting ads.
“We realized it was a mindset change: You have to be recruiting, rather than hiring,” Riley said.