In December, the U.S. saw growth slowdown. However, the hiring pace remained quite stable to keep the economic expansion on track despite the deepening downturn in a manufacturing sector. On Friday, after closely watching monthly employment report, the Labour Department can buttress the Federal Reserve’s assessment monetary policies and economy are in a good place.
Now, in its 11th year, the run of upbeat data such as trade and housing, consumer spending have suggested expansion which is not under immediate danger of being derailed by a recession.
According to Ben Ayers, senior economist at Nationwide in Columbus, at the end of 2019 the job growth has set pace for continued strength from the consumer in 2020. The Trump administration’s trade war with China has increased the worries that a downturn might be triggered due to the three times interest rate cuts by Fed in 2019.
After the last month borrowing costs which are expected to remain unchanged at least throughout 2020, China is set to sign Phase 1 deal next week as policymakers are more confident. At the end of last year economists have pegged growth around a 2.3% rate.
According to a survey of economists, in December, the nonfarm payrolls will probably increase by 164,000. As in November the payrolls surged 266,000 after a strike in part as 46,000 production workers at General Motors returned to work. Other anticipated slowdown is attributed to a late Thanksgiving and seasonal volatility associated with it.
However, there are still associated concerns with the Labour Department’s Bureau of Labour Statistics (BLS). As it compiles that the employment data might not be fully capturing the impact on payrolls of Trump’s 18-month-long trade war with China which has bought recession to manufacturing units and led to company shutdowns.