Last Week’s Economic News in Review
As the government shutdown continues to narrow the number of economic data releases, we did see employment enjoy a strong surge while layoffs also increased.
The economy added 312,000 jobs in December, zooming past economists’ expectations of 218,000 jobs, the Bureau of Labor Statistics reported last week. Key job growth areas for the economy included healthcare, food and drinking establishments, construction, manufacturing and retail trade.
The unemployment rate grew by 0.2 percentage points to hit 3.9 percent in December, with the number of unemployed Americans growing by 276,000 to 6.3 million people. This was down from the same period a year ago, which saw 4.1 percent unemployment with 6.6 million unemployed people in December 2017.
Average hourly earnings for all non-farm jobs rose 11 cents to $27.48 in December. Compared to the same period a year ago, December’s average hourly earnings were 84 cents, or 3.2 percent higher than December 2017.
“The jump in payrolls in December would seem to make a mockery of market fears of an impending recession,” Capital Economics Chief Economist Paul Ashworth told the Reuters news services. “This employment report suggests the U.S. economy still has considerable forward momentum.”
Initial Jobless Claims
Looking at layoffs, first-time claims for unemployment benefits filed by the newly unemployed during the week ending December 29 grew to 231,000, a gain of 10,000 claims from the prior week’s total of 221,000, according to last week’s report from the Employment and Training Administration. This was well above the decline to 218,000 claims that economists had expected for the week.
The four-week moving average, which is considered a more stable measure of jobless claims, ticked down to 218,750, a decline of 500 claims over the preceding week’s average of 219,250 claims.
The Administration’s latest report marked the 200th straight week that initial claims have come in below the 300,000-claim level, which economists consider an indicator of a growing job market.
This week, we can continue to expect a limited calendar of economic and possibly delayed or canceled data releases due to the continued government shutdown:
- Monday – Factory orders for November from the Census Bureau.
- Tuesday – Consumer credit for November from the Federal Reserve; international trade for November from the Census Bureau.
- Thursday – Initial jobless claims for last week from the Employment and Training Administration; wholesale inventories for November from the Census Bureau.
- Friday – Consumer price index for December from the Bureau of Labor Statistics; the Federal Budget for December from the Treasury Department.