U.S. employers added 312,000 non-farm payrolls in December and average hourly earnings increased 0.4% for an annual increase of 3.2%. The unemployment rate rose to 3.9%, as those seeking jobs increased. October and November payrolls also were increased 58,000 from prior reports. The December data beat pre-report expectations.
While the December jobs data was stronger than anticipated, markets are still forecasting no more interest rate hikes in 2019.
"We will be patient as we watch to see how the economy evolves," Powell told the American Economic Association following the jobs report, adding that the Fed is not on a preset path of rate hikes and suggesting that it could pause on its policy tightening as it did in 2016. "We are always prepared to shift the stance of policy and to shift it significantly" if needed.
Comment: Markets liked what Powell said as he was clearly more dovish than his previous stance, helping ease concerns about the U.S. economy.