• What a way to end the year with the job market surging in the month of December and major revisions to prior releases.
• Headline Numbers:
• 312,000 net new jobs
• 419,000 increase in labor force
• 3.2% increase in average hourly wages
• With revisions, the last quarter of 2018 averaged 254,000 jobs and 2018 saw 2.6 million net job creation up from 2.2 million in 2017.

This was yet another report that sees prosperity making it to people that have been on the outside looking in for years. 

• 92,000 high school dropouts came into the labor market
• 253,000 high school grads came back 
• 32,000 manufacturing jobs, bringing 2018 total 284,000
• 38,000 construction jobs for the month, 280,000 for 2018

Three consecutive months of 3.0%+ wage growth, which hadn’t been achieved in a decade, is remarkable.  And for those that believe the Fed should wreck the economy because of greater job creation, and even improved wages, keep in mind the spike in wages on the eve of the Great Recession that began in Dec 2007:

• Aug 2007 3.4%
• Sep 2007 3.1%
• Oct 2007 3.0%
• Nov 2007 3.1%

Speaking of Federal Reserve

Fed Chairman Jay Powell steps up to the plate and makes it right.  Highlights from his comments today:

• "We're listening sensitively"
• “Muted inflation”
• “Will be patient”
• "We're always prepared to shift policy and shift it significantly"

Jay Powell also said he won’t resign if President Trump requested, but he is open to looking at quantitative tightening.

China Next

With employment zooming along, and the Fed willing to let data dictate policy, the market can now set its sights on trade negotiations next week.  I have said from day one, America could win this “war.” But in the end, a deal would be win-win for both countries.  I know China wants to be the world tech leader, but they must not be allowed to steal U.S. know-how, especially in board daylight.