Economy

A strong jobs report could provide reassurance on economy

A strong jobs report could provide reassurance on economy

Labor market data is being closely watched for signs of whether tightening financial conditions could be impacting on companies' hiring decisions.

"A substantial surprise in the jobs number, either higher or lower, would likely elicit a significant market reaction", economist Veronica Clark said in a note. "New orders have dried up and this will take a toll on business investment and growth in 2019".

Depending on how long it lasts, the shutdown "could be a big negative" in next month's jobsreport, which will reflect January employment, Kevin Hassett, a top economic adviser to President Trump, said Thursday.

The drop was the largest since October 2008, when the economy was in the throes of a recession.

The ISM said that demand had "softened".

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 per cent - the highest since September 2017 - from 62.9 per cent.

Employment growth has been steady over the a year ago but has typically trailed behind the latest numbers. The survey's factory employment measure dropped to 56.2 in December from 58.4 in the prior month.

Major companies such as Apple say their sales are being jeopardized by the tariff-fueled trade war between the United States and China.

Personal data hack of 100s of German politicians, celebs
Parliamentary group leaders were notified of the attack late on Thursday. "Sources have said that past hacks had Russian links". Bild newspaper said all the data stolen in the attack dated back to before October 2018 but it was not clear when it began.

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.

Despite other data showing a slowdown in manufacturing, the nation's factories added 32,000 jobs in December.

USA stocks extended losses on the weak ISM survey, with the Dow Jones Industrial Average falling more than 600 points at one point. The U.S. dollar turned positive against a basket of currencies. A sharp stock market sell-off has stoked fears about the economy's health.

The jolt in hiring offers a dose of reassurance after a tumultuous few months as the outlook from the financial markets has turned decidedly bleaker. Economists polled by Reuters had forecast private payrolls advancing 178,000 last month following a previously reported 179,000 increase in November. A strong holiday shopping season is expected to have boosted retail employment while transportation and warehousing payrolls probably rose, driven by seasonal hiring. The ADP report, which is jointly developed with Moody's Analytics, was published ahead of the government's more comprehensive employment report for December scheduled for release on Friday.

The report, which exceeded nearly every analyst's prediction, follows Thursday's report from ADP/Moody's which showed private sector employment grew by 271,000 last month.

"The Trump economy is making America great again as the government dependency cycle is being broken more and more each day through the best social program invented - a real, productive, meaningful job", said Rick Manning, the president of Americans for Limited Government, in a statement Friday on the jobs numbers.

Nonfarm payrolls jumped by 312,000 jobs last month, the largest gain since February, as employment at construction sites snapped back after being restrained by unseasonably cold temperatures in November. Following modest gains of 0.2% in November, economists estimate average hourly earnings rose 0.3% last month. It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population. Some of the moderation in employment gains has been attributed to the stock market rout. Unadjusted claims for both of those states declined last week. Claims have now increased for three straight weeks. Claims data tends to be volatile around year-end holidays.

Economists had forecast the pace of hiring would slow, as employers had trouble finding the workers they needed.


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