December Jobs Report Offers Welcome News; 2018 a Good Year for Employment
- Jan 4, 2019
Despite recent news reports about tariffs and trade wars, the plunging Dow and a lukewarm impact from tax cuts, the U.S. economy started the new year with some welcome news by adding 312,000 jobs in December 2018—well above analysts’ predictions. According to the Labor Department, the unemployment rate now stands at 3.9%, the lowest number in nearly half a century. The higher-than predicted jobs numbers were fueled by growth in health care, manufacturing, construction and warehousing.
For 2018 overall, the Labor Department cited the creation of 2.6 million jobs—the greatest annual growth since 2015. The news was welcome on Wall Street, with the Dow surging 400 points at the January 4 opening bell. In other economic news:
- GDP growth in 2018 hovered at approximately a 1% increase each quarter. Compared to the 2017 rate of 2.3%, 2018 growth through November 2018 was 3.4%.
- The 2018 U.S. inflation rate was 2.2% through November 30; the December rate will be released on January 11, 2019. This rate was 2.5% in October, compared to 2.3% in September.
- 2018 U.S. wage growth at 3.2% has been significantly offset by inflation: 2.2% in 2018, resulting in net growth of 1%, not considering additional reductions due to individual income tax liabilities and additional costs.
It will be interesting to see how this data will impact the Federal Reserve’s decision on future interest rate hikes, which the Trump administration has been adverse to.
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Timothy Speiss is a Tax Partner in the Private Client Services Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.
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