U.S. employers added the most workers in 10 months as wage gains accelerated and labor-force participation jumped, reflecting a robust job market that nevertheless faces mounting risks in 2019.
Nonfarm payrolls increased by 312,000 in December, easily topping all forecasts, after an upwardly revised 176,000 gain the prior month, a Labor Department report showed Friday. Average hourly earnings rose 3.2 percent from a year earlier, more than projected and matching the fastest pace since 2009. Meanwhile, the jobless rate rose from a five-decade low to 3.9 percent, reflecting more people actively seeking work.
The hiring and wage gains will support consumer spending and offer some respite after a spate of weak economic data and cuts in corporate revenue forecasts fueled stock-market jitters. Still, it may be hard to replicate such labor-market strength in 2019 amid the U.S.-China tariff war, softening manufacturing, a housing slowdown and a projected cooling in global growth.
Federal Reserve Chairman Jerome Powell is scheduled to speak later Friday morning in Atlanta. While the report is in line with the Fed’s view of a healthy job market and officials last month penciled in two interest-rate hikes for 2019, the central bank may need more evidence of strength before moving forward with the next increase following four in 2018.
Before Friday’s report, investors had begun betting that policy makers will instead end up cutting borrowing costs.
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