Strong US jobs growth makes ‘mockery’ of market fears


US employers hired the most workers in 10 months and wages accelerated at a robust pace in December, suggesting the economy would avoid a sharp slowdown.

US nonfarm payrolls increased a seasonally adjusted 312,000, beating economists’ expectations for 177,000, according to a Reuters poll.

Average hourly earnings rose 3.2% in December, the quickest pace since 2009.

The unemployment rate rose to 3.9% in December from 3.7% in November.

The latest economic data was welcomed by Wall Street, which had been in a downward spiral towards the end of 2018 amid concerns the Federal Reserve would continue to raise rates as the economy slowed.

In New York, the Dow Jones rose 2%, the S&P climbed 1.85% and the Nasdaq soared 2.37% in early trading.

“The jump in payrolls in December would seem to make a mockery of market fears of an impending recession,” Paul Ashworth, chief economist at Capital Economics in Toronto, told Reuters.

“This employment report suggests the US economy still has considerable forward momentum.”

Investors had been concerned about the health of the US economy, which is in the ninth year of expansion, after surveys showed a sharp decline in consumer confidence and manufacturing activity last month.

The upbeat US jobs data is in sharp contrast to a report showing Chinese factory activity contracted for the first time in 19 months in December and weak manufacturing across Europe.

The Federal Reserve, which has raised interest rates four times in 2018, is likely to push ahead with two more rate increases this year.

“This should, at least for today, mute expectations that the Fed is off the table completely this year,” said Omair Sharif, a senior economist at Societe Generale in New York.


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