The U.S. economy added another 312,000 jobs in December, blowing out all forecasts and surprising economists who did not expect such great gains.
According to Bloomberg:
Nonfarm payrolls increased by 312,000 in December, easily topping all forecasts, after an upwardly revised 176,000 gain the prior month, a Labor Department report showed Friday. Average hourly earnings rose 3.2 percent from a year earlier, more than projected and matching the fastest pace since 2009. Meanwhile, the jobless rate rose from a five-decade low to 3.9 percent, reflecting more people actively seeking work.
By the way, the jobless rate rising is not exactly a bad thing.
As Bloomberg notes, the worker participation rate “rose to 63.1 percent — the highest since September 2017 — from 62.9 percent.”
The unemployment number going up a bit is actually good news. What happened is that 400,000 people re-entered the job market looking for work. So, for the first time in a decade these people who were thought to be chronically out of work felt the market was hot enough to try and re-enter the work force.
According to Tim Mahedy, Bloomberg Economics:
This is the strongest employment report of this economic cycle — hands down. While we’ve seen greater job gains in some months, the plus-300,000 number along with another increase in average hourly earnings clearly signals that the economic expansion ended 2018 on strong footing. Perhaps most surprising was the two-tenths rise in the unemployment rate due to an increase in participation. It’s one month of data, but talk of the Fed cutting rates in the near future should be off the table for now.
Indeed, the economy’s strength seemed to spread out over nearly every sector, business, and industry.
Average hourly earnings for all private workers rose 0.4 percent from the prior month following a 0.2 percent gain, the report showed. The annual increase followed a 3.1 percent advance.
Another measure, average hourly earnings for production and non- supervisory workers, increased 3.3 percent from a year earlier.
While worker pay has risen very gradually during most of the economic expansion, companies have been competing more vigorously in recent months to attract and retain workers.
Thanks, Donald Trump.
Follow Warner Todd Huston on Twitter @warnerthuston.