Job Growth Exceeds Forecasts in December Jobs Report

Jan 07, 2019
| Michael Altiero
December 2018 Jobs Report

Some economists and other experts fear that a recession is coming in the United States. The results from November’s Jobs Report helped to boost these concerns mainly due to job growth falling short of expectations.

With 2018 now over and uncertainty for what’s to come in 2019, experts remain split on what will happen to the U.S. economy.

One important factor that everyone was looking to as an indicator were the results of the December 2018 Jobs Report. Released on January 4th Bureau of Labor Statistics, the data is extremely positive. Let’s take a closer look at some highlights from the report.

Job Growth Far Exceeds Expectations

One of the bigger disappointments in the November report was that job growth missed the forecasts set by industry experts. Because of this, expectations for December were very low with most economists and publications forecasting an increase of around 180,000 jobs.

However, the results far exceeded expectations as the United States economy added a staggering 312,000 new jobs in December. This was the biggest single-month gain since this past February when 324,000 jobs were created.

Considering the current uncertainty of the stock market and worker shortages, this result was met with optimism by many analysts, especially as fears of a recession have grown over the last several months.

These strong results even resulted in a boost to the stock market, with the Dow Jones industrial average increasing 2.9% by the early afternoon of January 4th.

Wages Also See an Increase in December

Another closely watched statistic in the Jobs Report in recent months has been wage growth. November’s data saw no increase from October, but that wasn’t the case in December.

Last month, average hourly earnings increased by 11 cents to $27.48, increasing the annual gain to 3.2%, a new nine-year high. This was the kind of result analysts were hoping to see as the worker shortage continues to hit U.S. employers.

It will be interesting to see if wages continue to grow as we enter 2019. Experts seem to be split on whether or not this will happen and for how long.

Unemployment Increases from a 50-Year Low

One of the positive results over the last 3 months has been that unemployment rate was at a 50-year low of 3.7%.

In December, unemployment rate increased to 3.9%. However, experts aren’t concerned with this number at it is due to an additional 419,000 Americans who entered the labor force. The Labor Department said these individuals were drawn in due to the strong job market.

Because unemployment rate increased for a good reason (increased participation), many view this as a positive indicator for the job market and the economy.

What does 2019 Have in Store for the United States Economy?

Despite the positive results of the December Jobs Report, some experts are still concerned that a recession or economic decline could be on the horizon. And even though Jobs Report data could remain positive, other factors could cause this to happen.

All eyes will be on the January 2019 Jobs Report to see how the economy and labor market start out the New Year.

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