Economy

USA adds solid 145,000 jobs in December; unemployment steady at 3.5%

USA adds solid 145,000 jobs in December; unemployment steady at 3.5%”

The Federal Reserve's three 0.25% rate reductions from July to October may have helped stabilize expectations damaged by the tariff and trade war between the USA and China that was at its height in the summer.

Canada's economy created 35,200 jobs in December, Statistics Canada said Friday in Ottawa. Federal Reserve policy makers are likely to keep holding interest rates steady after cutting three times in 2019 to insure against risks from trade-policy uncertainty and sluggish global growth, though further weakness could raise concerns about the durability of the record-long USA expansion.

"It's a real question why wages haven't accelerated more", said Jay Bryson, acting chief economist at Wells Fargo & Co. "Part of it may be just due to the underlying fact that inflation expectations among folks just remain very very low".

For the moment, though, "the consumer" is still calling most of the shots in the economy, even in the labor market.

The goods-producing sector added 15,700 jobs, helped by a gain of 17,000 jobs in the construction industry, with British Columbia and Ontario contributing the most to the rise, Statistics Canada reported. The market had penciled in a gain of 164,000. Over the last 12 months, average hourly earnings have increased by 2.9 percent. And low US unemployment is still stunning. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

Friday's report also showed that American women held more jobs than men in December for the first time in almost a decade.

The number of long-term unemployed (those jobless for 27 weeks or more), was 1.2 million. I expect workers will see a 9 cent, or 3.09 percent annual, earnings bump.

Unemployment rates fell for nearly all categories, with the exception of men aged 55 and over, where it rose from 4.9 percent to five.

Employment in health care increased by 28,000 in December.

The gain in jobs came as the number of private sector employees rose by 56,900, offset by a loss of 21,500 public sector jobs. Peter Tchir, head of macro strategy for Academy Securities, called this "the one impressive number" in Friday's report. December's slowdown partially reflects a large jump in retail jobs at the height of the holiday-shopping season. Employment rose in professional and business services, with 10,000 added payrolls.

"Nominal wages rose 3.1% year-over-year in November, which is slower than expected in an economy that has had historically low unemployment", EPI wrote before continuing.



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