U.S. Non-farm Payrolls Crush Expectations

The Labor Department surprised markets Friday, releasing the best U.S. non-farm payrolls report in ten months, and handily beating economist estimates of job growth in the U.S.

Not only did the 266,000 new jobs blow expectations of 180,000 new jobs out of the water, but the unemployment number ticked back down to a historic low, and wage growth remained at its strongest in the past decade.

The numbers suggest the U.S. economy is in no danger of stalling, and it appears the U.S. consumer is willing and able to keep the eleven year old expansion alive heading into 2020, as they also decide whether or not to re-elect President Trump.

One thing the data did was to validate the Federal Reserve claim this past October that no more interest rate cuts are needed to stimulate the economy. As they said, the three cuts in 2019 were enough to keep the U.S. economy going strong without introducing excessive inflation.

The drivers of the excellent employment report were the manufacturing sector, which reclaimed all 43,000 of the jobs it lost in October thanks to the end of the GM strike, as well as the healthcare sector, which added an astounding 60,200 new workers. There was also a nice uptick in hiring at restaurants and bars, likely ahead of the holiday season.

The strong report also highlights the fact that while the U.S.-China trade war has sent the manufacturing sector into a recession, it hasn’t spread to the broader economy yet, which should buy the White House some tome as they complete the phase one trade deal with Beijing.