The economy of the United States added 2.6 million employed in 2018, after accelerating the rate of hiring to 312,000 jobs in December. It is almost half a million more workers when compared to the previous year. There are also more than people who seek employment in an active way, which caused the unemployment rate to rebound two tenths and be placed at 3.9%. The indicator does not include the partial closure effect of the Government.
The market consensus anticipated 176,000 employed in the month of December and unemployment fell by one tenth, to 3.6%. The unemployment rate is in spite of the rebound in line with the average estimate anticipated by the Federal Reserve by the end of 2018. The data as a whole, therefore, would justify the central bank moving forward with the standardization process. Salaries also rose 3.2% in the year.
Unemployment is the highest since last June. But the increase is explained because 419,000 people seeking a job entered the labor market. That caused the participation rate to rise to 63.1%. It is two tenths more than in November and four more than the one registered a year earlier. If you take into account the people who are on the sidelines, unemployment would be 7.6%.
But the data that comes from the economy are mixed. On the eve, the indicator of industrial activity was published, which fell to 54.1 points in December. Everything that is above 50 points indicates that the economy is expanding. The fall, however, is the highest recorded since the last crisis and reflects a moderation in growth. It remains to be seen if it is enough to change the strategy of the Fed.
The US central bank raised interest rates by a quarter of a point at its last meeting, to 2.25% and 2.5%. The internal survey of the members of the Fed now sees, however, as possible two more increases throughout 2019 compared to three that were indicated in September. The long-term rate also decreased to 2.9%. That assuming that the economy grows close to 2%.
The industrial activity data is consistent with a growth of 2.5%. But Morgan Stanley is less optimistic and anticipates that the expansion will moderate to 1.7%, the lowest rate since 2012. Goldman Sachs sees it three tenths higher, although it dropped four tenths of its last estimate due to the effect of the commercial uncertainty, the reduction of the fiscal stimulus and the global deceleration.
Loretta Mester, president of the Cleveland Fed, said before the employment data was published that one of the objectives of the central bank is to get as many people as possible to work. "But we also do not want the economy to overheat," he warned, "that's why we have to calibrate the policy to maintain expansion." In this sense, it ensures that the types are at the right level.