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2018: Still No End In Sight For Best Jobs Market Ever

Jobs: There's a word to describe December's jobs report: Wow! With 312,000 new jobs in December, employment growth was much stronger than anyone anticipated. That's especially true given recent squishy economic data. The jobs boom continues, a sign that there's still a lot of life left in the economy after all.

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There's really no way to spin December's jobs data in a negative way. Not only did the number of jobs come in at nearly twice the consensus estimate, but the two previous months were revised up by 58,000. So the report was really much stronger than even the headline number indicates.

Since President Donald Trump took office nearly two years ago, some 4.8 million new payroll jobs have been created. That's more than four times as many as created during President Obama's first four years.

Hold on, you say, didn't the unemployment rate jump from 3.7% to 3.9%? It did. Yes, but not because more people were unemployed, but because more people entered the labor force, seeking opportunities that didn't exist before.

It's actually a bullish sign. Some 419,000 people entered the workforce during the month, driving the labor force participation rate to 63.1%, up from 62.7% a year ago. That bellwether employment figure declined pretty consistently during the job-poor Obama years, from 65.7% when Obama entered office to 62.9% when he left. It stabilized under Trump. Last month's 63.1% tied for the highest point since September 2013.

Jobs: Broad Gains In 2018

Last year, virtually every sector of the economy gained jobs. In addition to the 2.6 million new jobs overall for all of 2018, health care employment added 346,000, food and restaurant employment added 235,000 jobs, construction 280,000 jobs, manufacturing 284,000 jobs, retailing 92,000 jobs, and professional and business services 458,000 jobs. It was a great year for workers, as Heritage Foundation economist Steve Moore recently pointed out in IBD.

And it wasn't all about jobs. Average hourly earnings grew in 2018 by 3.2%. That's the fastest growth since 2008. And real household income, at $63,554, is now at its highest ever, up 3.2% from last year and 4.3% since 2000, the previous record high, according to a recent report from Sentier Research. With inflation now running below 2%, these are the best of times to be a worker.

None of this is accidental. It's all due to policies that boosted investment, productivity and economic growth: namely, tax cuts and deregulation. Trumponomics has been a rousing success.

Socialism: 'Just Say No'

But there are threats on the near horizon. As the New Year began, some 22 states raised their minimum wages, a move that will cost many low-end, poorly-skilled workers their jobs. And the new Democrat-dominated House has a full agenda of socialist policies it's keen to impose, ranging from a guaranteed income and Medicare For All, to a "Green New Deal" and "free" college. With U.S. debt now at $22 trillion, the cost of these socialist policies would be fiscally ruinous.

The Fed seems to be backing down from earlier threats that it might continue raising interest rates in the New Year, with Fed Chief Jerome Powell promising "flexibility."

We hope, above all, that common sense will prevail. If it does, we might see many more "surprises" in the jobs data, just as we did in December.

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