MercoPress. South Atlantic News Agency

US economy ever so strong: 312.000 jobs added in December

The unemployment rate nudged higher to 3.9%, near historic lows. Average hourly pay increased at an annual rate of 3.2% - an improvement on last month's 3.1%.

The US economy created many more jobs than expected in December, according to the latest government data. Employers added 312,000 jobs, far ahead of predictions of 177,000, the Labor Department said.

The unemployment rate nudged higher to 3.9%, but is still near historic lows. Average hourly pay increased at an annual rate of 3.2% - an improvement on last month's 3.1%.

The gains sent US stocks soaring, reversing losses from Thursday. The Dow Jones Industrial Average ended Friday almost 3.3% higher. The S&P 500 rose 3.4%, while the Nasdaq jumped more than 4.2%.

Analysts said the employment surge shows the US economy remains healthy - despite fears of a slowdown that have battered the stock market in recent months.

Paul Ashworth, chief US economist at Capital Economics, said the job increases “make a mockery of recession fears ”.

“This employment report suggests the US economy still has considerable forward momentum,” he said.

Overall, payrolls rose by 2.6 million last year, compared to 2.2 million in 2017, as tax cuts and increased government spending helped to boost the economy.

The robust labor market has encouraged more people to look for work - one reason for the uptick in the unemployment rate in December.

After years of relatively stagnant wages, it has also started to force employers to pay more. Average hourly pay for private sector workers increased more than 3.1% year-on-year for the last three months of 2018 - the strongest streak since 2009.

December's rate of hiring far exceeded the roughly 200,000 jobs the US economy has added on average each month over 2018. The gains largely occurred in fields such as health care, hospitality and leisure, construction, manufacturing, and retail.

New factory jobs in December meant manufacturing ended 2018 with the most jobs added in one year since 1997. The Labor Department also revised job numbers for October and November, with both month's showing more jobs created than previously thought.