The US job market added far more jobs than expected in December

The US job market is hot.
The US job market is hot.
Image: Reuters/Aaron Josefczyk
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The US job market finished up 2018 with a bang: Employers added 312,000 jobs in December, blowing past expectations for around 180,000.

It was the 99th consecutive month of job gains. The average pace of monthly job gains for 2018, at around 200,000, was stronger than the previous year’s average of 182,000 per month. While the unemployment rate rose slightly to 3.9%, according to Bureau of Labor Statistics data released today (Jan. 4), it’s still the lowest it has been for several decades.

The numbers may ease fears of a broader economic slowdown. Investors will look to see whether this eye-popping employment data spurs the Federal Reserve to raise interest rates more quickly, which could dampen the stock market and economic growth. Traders will be closely scrutinizing a panel appearance by Fed Chairman Jerome Powell at 10:15 US Eastern time for any insight into the Fed’s upcoming policy decisions. 

US workers should have a little extra money in their pockets. Average hourly earnings rose by 3.2% from a year ago, a slightly higher pace than the previous month. Overall inflation is running at 2.2%, so Americans are seeing modest real gains in their paychecks.

The picture isn’t all rosy of course. US-China trade tensions have begun to impact business and consumer confidence. And weak manufacturing numbers earlier this week didn’t help investors, still reeling after global stock markets suffered their worst year in a decade.

A key question is whether the US economy—torqued by a partial government shutdown, trade concerns, and a fading tax boost—can keep up its momentum. For now, employers are showing few signs of discouragement.