Did the U.S. ring out ’17 with strong job growth?
The economy is expected to close out 2017 with another solid jobs report, underscoring a labor market that’s maintaining its momentum despite a shortage of workers.
Minutes of the Federal Reserve’s mid-December meeting, which featured the third interest rate hike of the year, and surveys of the manufacturing and service sectors will round out this week’s economic news.
The Fed rate increase was widely expected, but outgoing Chair Janet Yellen was fairly restrained in her remarks on the then-looming Republican tax cuts, saying they should modestly boost growth. Minutes of the Dec. 12-13 meeting, slated for release Wednesday, could reveal whether most Fed policymakers believe the tax overhaul will meaningfully bolster the economy or foment trouble down the road by adding to the deficit. The meeting summary also may show whether Fed officials think the 4.1% unemployment rate will finally trigger a pickup in sluggish inflation in 2018.
Manufacturing has enjoyed a revival this year on the back of a resurgent global economy and the oil sector rebound. Growth in factory activity slowed the past couple of months after hitting a 13year high in September. But that was largely because of quirks in deliveries related to August hurricanes in Texas and Florida, Nomura economist Lewis Alexander says. Economists surveyed by Action Economics reckon the Institute of Supply Management’s index of manufacturing activity edged higher in December.
On Friday, the Labor Department releases its closely watched employment survey. The low unemployment rate crimped hiring a bit in 2017 by providing employers fewer available workers. Still, the public and private sectors added a solid average of
174,000 jobs a month through the first
11 months of the year, down from
187,000 in 2016. The hurricanes led to weak payroll gains in September. But job growth averaged a robust 236,000 in October and November, partly reflecting the return of workers idled by the storms. Economists are forecasting a healthy 190,000 new jobs in December.
Like manufacturing, the service sector, which makes up about 80% of the economy, has been firing on all cylinders. In October, ISM’s non-manufacturing index hit the strongest growth level since its debut in 2008. It, too, retreated slightly in November because of hurricane-related volatility. But economists expect ISM to announce that the index ticked higher in December.