Upbeat employment report underscores US economic strength

Monday, 7 January 2019 00:00 - - {{hitsCtrl.values.hits}}

Job seekers and recruiters gather at TechFair in Los Angeles, California, US - Reuters

WASHINGTON (Reuters): US employers hired the most workers in 10 months in December while boosting wages, pointing to sustained strength in the economy that could ease fears of a sharp slowdown in growth.

The upbeat employment report from the Labour Department on Friday stood in stark contrast with reports this week showing Chinese factory activity contracting for the first time in 19 months in December 2018 and weak manufacturing across much of Europe.

Concerns about the US economy heightened following surveys showing sharp declines in consumer confidence and manufacturing activity last month, which roiled financial markets. Both were seen as more red flags that the economic expansion, now in its ninth year and the second longest on record, is losing steam.

“The jump in payrolls in December would seem to make a mockery of market fears of an impending recession,” said Capital Economics in Toronto Chief Economist Paul Ashworth. “This employment report suggests the US economy still has considerable forward momentum.”

Nonfarm payrolls surged by 312,000 jobs last month, the largest gain since February 2018, as employment at construction and leisure and hospitality locations snapped back after being restrained by unseasonably cold temperatures in November 2018.

Job gains were reported across all industries, with the exception of the information sector, which shed employment for the second straight month. Data for October and November 2018 were revised to show 58,000 more jobs added than previously reported.