Recession? What recession?
While many economists were predicting one just a few weeks ago, they may want to rethink that idea, especially with the jobs reports for December 2018 and January 2019.
In December, the U.S. economy added another 312,000 jobs.
That brought the total employment gains in 2018 to a three-year high of 2.64 million.
“That was the strongest employment report of this economic cycle -- hands down. While we've seen greater job gains in some months, the plus-300,000 number along with another increase in average hourly earnings clearly signals that the economic expansion ended 2018 on strong footing.” said economist Tim Mahedy, as quoted by Bloomberg.
Then, in January 2019, the economy added another 304,000 jobs – far better than the 165,000 jobs anticipated by analysts.
“The overwhelming conclusion from today’s numbers is that the U.S. labor market remained incredibly strong at the start of 2019,” said Leslie Preston, senior economist at TD Economics, as quote by KUSI News.
The unemployment rate did tick higher to 4% from 3.9% thanks to the shutdown. However, we expect that higher rate to be a temporary situation.
Wage growth was slightly higher, too.
Average wages were up 3 cents, or 0.1% to $27.56 an hour.
"The secret sauce here is probably wage increases. Rising wages paired with weakening inflation mean real wages are rising strongly, and that's pulling more people into the workforce," said Robert Frick, corporate economist with the Navy Federal Credit Union, as quoted by CBS News. "This could boost the economy this year, as more disposable income means more consumer spending.”
Higher wages and jobs figures are a sure sign that the US economy remains strong, despite market volatility. Even better the hiring boom suggests the fear of a looming recession is greatly overblown.
Instead, we think the U.S. economy is likely to continue its strong growth trend.
Stay tuned to The Cheap Investor for more on how to invest in continued growth.