US jobs and wages up in latest employment report
The December 2018 US jobs report has record-breaking wage and job increases.
The US added 312,000 jobs in December 2018. Wages also increased to its highest number in 10 years. Wall Street has responded favorably on the strength of the news.
Job and wage strength despite markets
In December, the US economy added 312,000 jobs, exceeding expectations of financial experts. Industries like hospitality, retail, and education saw employment growth. Job seekers not only found employment but took home more money as well. Hourly wages surged by 3.2% and rose to its highest levels since 2009. The only downside to the account was that the unemployment rate grew to 3.9%. However, that’s possibly an indication that more US residents are more actively looking for employment.
Though December 2018 was the worst for the US stock market, this job report may mean good news for Wall Street in January 2019. The growth in wages will likely mean US residents will spend more, leading to increased consumer confidence. Financial experts like Lewis Alexander, analyst at Nomura, a financial services group, believe that the good news will alleviate volatility in the US markets.
‘We expect the December employment report to remind markets that the US growth outlook remains stable despite financial market volatility,’said Alexander.
However, another financial analyst, Mike Lowegart, head of investment at eTrade, think that the uptick on Wall Street will be temporary and won’t move the markets for long.
‘To be sure this is a good thing, but if the past few months are any indication, the market isn’t moving on fundamentals: Trade is the alpha and the omega',said Loewengart.
How jobs report affects the Fed
The positive employment report could affect the actions of US Federal Reserve Chair, Jerome Powell. The account will likely help prove his assertion that interest rate hikes are needed from the US central bank since the US economy is robust. It’s unclear how the Fed will or won’t be affected by the news. Economists like, Michael Gapen, from Barclays thinks that this may lead to more interest rate increases.
‘This should give the Fed some comfort that their assessment of the economy is correct and that they’re on track for further rate increases this year’, said Gapen.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See your opportunity?
Seize it now. Trade over 17,000+ markets on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
