• US adds 312,000 jobs in December
• Wages climb 0.4% mom and 3.2% yoy
• Unemployment rate rose to 3.9%
• Employment report indicates recession is not going to happen anytime soon

For all the current market doom and gloom over the US’s prospects, there are some positives, such as the red-hot jobs market.

US non-farm payroll (NFP) posted an overall impressively strong set of data. The US gained 312,000 new jobs in December, capping off the biggest increase in hiring in three years and showed that second longest economic expansion in US history still has plenty of staying power despite growing worries about a slowdown. It’s also the highest level since February 2018. The change in total nonfarm payroll employment for November was revised up from 155,000 to 176,000, and the change for October was revised up from 237,000 to 274,000. With these revisions, employment gains in October and November combined were 58,000 more than previously reported. Indeed, the US added an average of 254,000 jobs a month in 4Q18, the biggest increase since 2016.

The increase in jobs was widespread at the end of the year. Health-care providers hired 50,000 people, professional firms filled 43,000 positions, manufacturers added 32,000 jobs, construction firms beefed up payrolls by 32,000 and restaurants employed 41,000 additional workers.

Unemployment rate rose to 3.9% and the number of unemployed persons increased by 276,000 to 6.3m. A year earlier, the jobless rate was 4.1%, and the number of unemployed persons was 6.6m. The labor force participation rate was at 63.1% in December, and the employment-population ratio was 60.6% for the third consecutive month. Both measures were up by 0.4 percentage point over the year. Average hourly earnings rose 0.4% mom, above expectation of 0.3% mom. As a result, the increase in pay in the past 12 months rose to 3.2% from 3.1%, matching a post-recession high set earlier in the year.

Source: BIMB Securities Research - 7 Jan 2019