US employers went on a surprising hiring spree in December

Ivan Schwartz
January 8, 2019

This marks the eighth consecutive month with positive job growth and puts trucking employment 2.5% higher than at this point a year ago.

Optimism over hiring prospects caused the participation rate in December to climb to 63.1% from 62.9% the month previously (i.e., more out-of-work individuals chose to rejoin the labor force). In addition, data from both November and October were revised upward by a combined 95,000 jobs, bringing up the average job growth for the fourth quarter to 254,000 jobs per month. A month ago, the BLS reported a total jobs level of 149.893 million. Since President Trump was elected in November 2016, the US economy has created 5 million jobs.

In the past, Democrats have made similar efforts to turn good jobs reports into bad ones. 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 President Donald Trump's tax cuts. Retail employment increased by 23,800 jobs. The economy created 2.6 million jobs past year compared to 2.2 million in 2017. It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population. For full-year 2018, the number of American construction jobs was +280,000, a modest improvement over 2017's +250,000.

The U.S. central bank raised rates four times in 2018. In December 2018, the unemployment rate for Hispanics fell to a series low (4.4 percent), matching October 2018. The decline comes on the heels of strong hiring in the previous couple of months, which would suggest that parcel companies simply ramped up their hiring for the holidays earlier than they normally would. In the past 12 months, average hourly earnings have only increased 84 cents, or 3.2 percent, and that doesn't even take inflation into account.

The economy grew at a 3.4 percent pace in the third quarter.

And businesses are still searching for more workers. Economy-wide (excluding bosses), the pay hikes were +3.3% hourly and +3.0% weekly.

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Other indicators pointed to a slowdown in the manufacturing sector. For the year, the trucking industry added 36,600 jobs in 2018, up from 9,400 added in 2017 and is the best year for hiring within trucking since the 50,400 jobs added in 2014.

The unemployment rate ticked up by two-tenths of a point to 3.9%, but that was due mostly to more workers joining the job hunt, according to the closely-watched report. Hicks says part of the job gains were especially strong in seasonal sectors such as retail, however manufacturing also added 32,000 jobs.

Almost three-quarters of the "education and health services" jobs advance originated in "health care and social assistance" (+58,000 jobs). Education added 24,000 jobs.

"The December jobs statement contains some positive news, yet these gains threaten to slip away because of the government shutdown". The inference is that the latest Xmas season was a more-than-usually-busy time for shopkeepers.

Even with fear of a global economic slump depressing stock markets, Friday's jobs report for December is expected to offer reassurance that the USA economy remains sturdy and on track to expand for a 10th straight year.

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