Fed Interest Rate Hikes and Socialists House Victory Contribute to Mixed December Jobs Report
Washington, DC— Friday, Congressman Mo Brooks (AL-05) highlighted the U.S. Department of Labor Bureau of Labor Statistics December jobs report.
Congressman Brooks said, “The December jobs report is a mixed bag. On the bad side, America’s unemployment rate worsened, from 3.7% to 3.9% (but still better than last year’s 4.1% unemployment rate). The number of unemployed Americans worsened by 276,000, to 6.3 million (but still 300,000 fewer unemployed than a year ago). Time will tell whether worsening unemployment rates and growing jobless numbers are a one-time blip or the beginning of a bad trend.”
Brooks continued, “On the good side, the economy added 312,000 nonfarm jobs (for a total of 2.9 million nonfarm jobs added over the past year). Average hourly nonfarm worker wages rose by 11 cents, to $27.48/hour, a healthy 3.2%/84 cents per hour increase from a year ago. America’s labor participation rate improved from 62.9% to 63.1% (0.4 percentage points better than last year’s 62.7% rate).”
Brooks continued, “Overall, the December jobs report will be well received by some and not so well by others. For example, a modest worsening of unemployment rates may, paradoxically, cause the stock market to rise based on the inference that the Federal Reserve will be less likely to hike interest rates that have, to date, suppressed economic activity.”
Brooks concluded, “America’s economy is at a critical inflection point. We can go either way. America can continue the economic boom of the Trump presidency or slowly but surely slide into a recession. Two major threats have emerged that risk America’s economy and citizens’ jobs and incomes. On the one hand, the Federal Reserve’s interest rate hikes drive up production costs and make American industry less competitive in a very tough international market, thereby risking job losses and suppressing economic activity. On the other hand, Socialist Democrats control the House of Representatives, thus sending a strong signal to America’s job-creators that pro-growth policies are ending and that there is a growing risk of job-stifling tax increases, more costly federal government mandates, and even more welfare that undermines the work ethic that is the bedrock of economic activity. The stock market reflects how these two threats can impact America. Since October, as it became likely that Socialists would win the House and Federal Reserve interest rate hikes would continue, the Dow Jones Industrial Average has dropped over 4,000 points, a loss of almost 20% of its value.”
Key takeaways from the Bureau of Labor Statistics December jobs report are:
- America’s economy added 312,000 new, nonfarm payroll jobs in December 2018.
- America’s December unemployment rate increased from 3.7% in November to 3.9% (a year-to-year improvement of 0.2 percentage points over the 4.1% December 2017 unemployment rate).
- Over the past year, the average weekly earnings for all non-farm American workers increased by 3.2%, or 84 cents (to $27.48/hour).
- The labor participation rate increased slightly to 63.1%, up from 62.9% in November.