Business Corpus: Massive 312,000 Job Gain Casts Doubt On Gloom; Dow Jones RalliesA huge 312,000 job gain cast doubt on stock market gloom over the economy, as the Dow Jones looked set to bounce back from Thursday's sell-off. The post Massive 312,000 Job Gain Casts Doubt On Gloom; Dow Jones Rallies appeared first on Investor's Business Daily.

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The U.S. economy added 312,000 jobs in December as the unemployment rate ticked up to 3.9%, the Labor Department reported on Friday. Average hourly wages grew 3.2%, the best since 2009. The Dow Jones and broader stock market opened sharply higher after the jobs report as Wall Street tried to rebound from Thursday's sell-off on the bad Apple (AAPL) news.

Economists expected 180,000 new jobs, 3.7% unemployment and 3.0% wage growth.

Jobs Report Details

Job gains for October and November were revised up by 58,000, leaving a monthly average gain of 254,000 jobs in the fourth quarter.

The fourth-quarter payroll gain was the best since Q3 2016. The U.S. created 2.64 million jobs in 2018, the best annual gain since 2015.

The 3.2% wage growth matched October's upwardly revised total for the highest since 2009. Aggregate weekly pay in 2018, which combines hours, job growth and wage gains, rose 5.2%, best since 2014.

The unemployment rate rose due to an increase in the labor force. The labor force participation rate rose to 63.1%, the highest in nearly five years.

Fed Chairman Powell On The Clock

The robust jobs report sets the stage for Fed Chairman Jerome Powell, who is expected to comment on the Fed policy outlook at an American Economic Association conference at 10:15 a.m. ET. Wall Street will key in on whether Fed Chairman Powell revises his Dec. 19 comment that the Fed's balance-sheet wind-down, known as quantitative tightening, would remain on autopilot.

The December jobs report was expected to be the first of a new era in which investors are no longer worried about future rate hikes. Markets were pricing in 0% odds of a rate hike this year and more than 50% odds of a rate cut by early 2020. Those odds reflect a Treasury yield curve that has inverted, with the 1-year Treasury yield higher than longer-term Treasury yields going out to the 7-year Treasury.

Economic growth is expected to slow markedly this year, with both monetary and fiscal policy turning from tailwinds to, at best, neutral by mid-2019. The weak Dow Jones and broader stock market, which seem to be pricing in something worse than a slowdown, could further dampen growth. Yet most economist still expect a soft landing, as long as trade war fears recede.

But even though the manufacturing sector hit some turbulence in December, the consumer economy and labor market are still showing signs of strength.

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The post Massive 312,000 Job Gain Casts Doubt On Gloom; Dow Jones Rallies appeared first on Investor's Business Daily.