USA economy added 312,000 jobs in December, blowing past expectations

The gains sent US stocks soaring Dow Jones Industrial Average ended Friday almost 3.3% higher S&P 500 rose 3.4% and Nasdaq jumped more than 4.2

The gains sent US stocks soaring Dow Jones Industrial Average ended Friday almost 3.3% higher S&P 500 rose 3.4% and Nasdaq jumped more than 4.2

Concerns about the economy had been boosted by surveys showing sharp declines in consumer confidence and manufacturing activity last month.

The blockbuster U.S. jobs numbers starkly contrasted with the mounting fears for the global economy of recent weeks - which have seen stock prices tumble and confidence wane among corporations who foresee slowing demand and weakening sales in 2019.

But in recent weeks, financial markets have been increasingly anxious about the path of economic growth this year.

Job gains were reported across all industries, with the exception of the information sector, which shed employment for the second straight month. There were also broad gains in hiring last month.

The strong job growth was broad-based with the goods sector adding 74,000 jobs, bringing its 2018 total to 624,000 up from 509,000 in 2017 and 82,000 in 2016. Average hourly earnings rose 3.2% from a year earlier, more than projected and matching the fastest pace since 2009. For the month, wages ticked up 0.4%.

As the stock market continues its rollercoaster ride, a Ball State University economist says the December jobs report will do a lot to ease recession worries.

The roughly 380,000 federal workers who were furloughed in December were not included in the report because the government shutdown started after the data was collected.

"It appears that higher wages are the reason why people are returning to the active labor force in large numbers", Paul Ashworth, chief North American economist, Capital Economics, told CNN.

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Finally, along with the job market report from the U.S. Bureau of Labor Statistics, news also came that the ADP Research Institute released its jobs report, and the figures from that were also encouraging.

The Fed raised rates four times in 2018.

Health care and education added 82,000 jobs last month, the largest jump in almost nine years. However, the stock market will have to weigh whether the strong job growth encourages the Fed to hike rates in 2019 more frequently than investors had previously anticipated. The Dow suffered its worst December since the middle of the Depression in 1931.

Growth forecasts for the fourth quarter are around a 2.6 percent annualized rate, with risks tilted to the downside amid fading stimulus from the Trump administration's $1.5 trillion tax cut package, a trade war with China and policy uncertainty in Washington.

The economy grew at a 3.4 percent pace in the third quarter. It is expected to slow to around 150,000 per month this year as workers become more scarce.

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.

"You're going to see a slowdown in business investment and hiring, especially by large firms", said Brusuelas, the RSM economist. The monthly average employment increase was +220,000, which was an increase of +20.6% versus 2017's monthly average rise of +182,000. Employment at construction sites rebounded last month, with companies hiring 38,000 employees after adding no workers in November.

Manufacturing added 32,000 jobs in December, including more than 19,000 jobs in durable goods and more than 7,000 in fabricated metal products.

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