Rebecca Cook | Reuters
Companies added 271,000 new positions as 2018 came to a close, smashing estimates of 178,000 from economists surveyed by Reuters. It was the survey’s best month since February 2017, which saw a gain of 280,000, and brought the average monthly gain for last year to 206,000.
December also showed a marked gain from November, when just 157,000 new jobs were added, a total revised lower from the initially reported 179,000.
“Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war. Favorable December weather also helped lift the job market,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “At the current pace of job growth, low unemployment will get even lower.”
Professional and business services led the way with 66,000 new positions, education and health services contributed 61,000 and leisure and hospitality added 39,000. In all, service-related industries were responsible for 224,000 of the new hires, while goods producers rose by 47,000.
On the goods side, construction grew by 37,000 and manufacturing added 12,000. Natural resources and mining lost 2,000 positions.
From a company size perspective, those with 50-499 workers led with 129,000, while small businesses added 89,000 and large firms hired another 54,000.
The results come amid growing concerns for an economy headed for above-3 percent full-year growth for the first time since the Great Recession ended in mid-2009.
In particular, manufacturing and housing numbers have been contracting, and even consumer and business confidence, which had been around record highs earlier in the year, have been waning in recent months. Earlier Thursday, the Mortgage Bankers Association reported that applications for home loans hit their lowest level in 18 years.
A significant part of the problem has been the trade battle between the U.S. and China, which has dented the previous high expectations for growth amid uncertainty over how long the tit-for-tat tariffs will last and what the final outcome will be. The two sides are in a truce period until March.
The uncertain climate has spilled over into financial markets, where stocks have been caught in a wave of volatility. The Dow Jones Industrial Average, for instance, is off more than 13 percent from its early October peak.
Amid it all, the jobs market has held up well.
Economists expect the government’s nonfarm payrolls report being released Friday to show 180,000 new jobs in December, with the unemployment rate staying at a 49-year low of 3.7 percent. That estimate could be revised higher following Thursday’s report.
“We wrapped up 2018 with another month of significant growth in the labor market,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.