What Economists Are Saying Ahead of December's U.S. Jobs Report

People stand in line to apply for jobs at a fair in Miami Lakes Florida

People stand in line to apply for jobs at a fair in Miami Lakes Florida

The ADP report has a spotty record predicting the private-payrolls component of the government's employment report and last month's surge probably exaggerates the strength of the labor market because of a seasonal quirk.

US stocks and Treasury yields surged Friday after Labor Department figures showed employers added the most workers in 10 months, wage gains accelerated and labor-force participation jumped.

210,000 jobs, 3.6 percent unemployment, 3 percent annual wage growth "The pace of job creation in December was likely immune to the market sell-off and intensifying political uncertainty", economists Yelena Shulyatyeva, Tim Mahedy and Carl Riccadonna wrote. Builders added 38,000 construction jobs, while manufacturers increased their payrolls by 32,000 workers.

Wage growth also picked up. And average hourly pay improved 3.2 percent from a year ago. Average earnings climbed to $27.48 an hour.

A large portion of the growth occurred in health care, construction, food services, retail trade and manufacturing. For the first 11 months of 2018, the US economy added an average of 206,000 jobs a month. That boosted job gains to an average 254,000 per month over the last three months.

USA private payrolls increased by the most in almost two years in December, suggesting sustained strength in the labour market despite ongoing financial market volatility.

The markets have been turbulent amid concerns that the US economy will be hurt by weakness in other countries.

Don't see the graphic above?

President Donald Trump cheered "GREAT JOBS NUMBERS" on Twitter while his chief economic adviser, Larry Kudlow, said told Bloomberg Television that there's "no recession in sight" following the "blowout" report. The White House's protectionism has lead to a trade war with China and tit-for-tat tariffs with other trading partners, including the European Union, Canada and Mexico.

Stephen Curry explodes for 10 3s as Warriors outgun Kings
Buddy Hield stole the show for the Kings in scoring 32 points on 8-for-13 shooting from the perimeter. Golden State shot 21 of 47 beyond the arc while Sacramento was 20 of 36.

The ripple effects from slower growth overseas could eventually hurt the USA economy, David Dollar, a senior fellow at the Brookings Institution, told NPR's Scott Horsley. "And then, of course, that affects the whole world".

Stocks jumped Friday in response to the jobs figures.

The report flies in the face of the growing pessimism recently plaguing financial markets that the USA economy is slowing and may even be slipping toward recession.

The strong labor market suggests the economy will continued to expand this year despite the ebb in consumer confidence, continued weakness in the housing market as well as cooling manufacturing activity. The ISM manufacturing index fell 5.2 percentage points in December and an index measuring new orders tumbled 11 percentage points.

The big unknown is the partial federal government shutdown.

Job gains were reported across all industries, with the exception of the information sector, which shed employment for the second straight month.

The increase potentially reflects filings from workers affected in the first week of the shutdown, which has caused the furlough of an estimated 350,000 federal employees.

While the unemployment rate increased to a five-month high, it may not be much of a concern because the participation rate rose to 63.1 percent - the highest since September 2017 - from 62.9 percent. "What we don't know is how many more acts there are yet to come".

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