Surprising Jobs Report Suggests Economy Remains Strong
IN THIS ISSUE:
1. Surprising 312,000 New Jobs Created in December
2. Stocks Soar on Fed Chairman’s Latest Remarks
3. Powell Said He Won’t Resign Even If Trump Asks Him To
4. US Economy Remains Strong, Despite Stocks’ Plunge
The economy and the stock markets got some really good news last Friday. The Labor Department reported that a surprising 312,000 new jobs were created in December. That was nearly twice the pre-report estimate of 176,000. And there was plenty of other good news in the jobs report, which I’ll summarize for you below.
Unrelated to the jobs report, there was other good news on Friday. Fed Chairman Jerome Powell assured the markets that the Fed will be “patient” when it comes to raising interest rates this year. Stocks soared over 800 points in the Dow in the hours just after Mr. Powell’s remarks. It now looks like there may be only 1-2 rate hikes this year (as I suggested in December) instead of 3-4.
In an unexpected twist in his post-speech press conference, Powell was asked if he would resign if President Trump asked him to. The Fed Chairman, who Trump appointed last year, replied bluntly, “No.” Hmmm.
Finally, we take a look at the economy as we start the New Year. While the “gloom-and-doom” crowd is predicting a new recession in late 2019, last Friday’s much stronger than expected jobs report may make them think twice. I still believe we will see 3% growth this year, or close to it. Something unexpected would have to happen to cause a recession in 2019, in my opinion.