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Strong Jobs Report Expected Even As Worries About Economy Grow

Worker Kelly Coman inspects an F-150 pickup on the assembly line at a Ford plant in Dearborn, Mich. Some indicators point to a slowdown in the manufacturing sector
Worker Kelly Coman inspects an F-150 pickup on the assembly line at a Ford plant in Dearborn, Mich. Some indicators point to a slowdown in the manufacturing sector.

The markets are a mess but companies are still hiring.

The economy added about 180,000 jobs in December and the unemployment rate stayed at a nearly 50-year low of 3.7 percent, private economists say. The Labor Department is due to release its monthly report at 8:30 a.m. ET Friday.

Employers added an average 170,000 workers in each of the prior three months. The jobless rate has held steady at 3.7 percent since September.

The strong jobs numbers contrast with a plunging stock market and concerns that the U.S. economy will be hurt by weakness in other countries.

On Wednesday, Apple cut its revenue estimates by billions of dollars, primarily because of weaker-than-expected iPhone sales in China due to that country's economic slowdown. Apple CEO Tim Cook said China's growth was hurt by "rising trade tensions with the United States."

The ripple effects from slower growth overseas could eventually hurt the U.S. economy, David Dollar, a senior fellow at the Brookings Institution, told NPR's Scott Horsley.

"We're living in a world where if China seriously slows down, that's going to have a big effect on literally more than a hundred different economies," Dollar said. "And then of course that affects the whole world."

Apple's downbeat announcement sent its stock plunging 10 percent Thursday. U.S. stock indexes also fell, with the Dow Jones Industrial Average closing down 660 points, or 2.8 percent. (The blue chip index has lost 15 percent in the past three months.)

But in the U.S., consumers did not hold back this holiday season, with sales up 5.1 percent over last year, according to a Mastercard report.

Still, consumer confidence slid in December, the Conference Board said. "Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term," said Lynn Franco, a senior director at the Conference Board.

Other indicators pointed to a slowdown in the manufacturing sector. The ISM manufacturing index fell 5.2 percentage points in December and an index measuring new orders tumbled 11 percentage points.

And the big unknown is the partial federal government shutdown.

Depending on how long it lasts, the shutdown "could be a big negative" in next month's jobs report, which will reflect January employment, Kevin Hassett, a top economic adviser to President Trump, said Thursday. But Hassett emphasized that the hundreds of thousands of furloughed federal workers will eventually receive back pay, diminishing the shutdown's negative economic impact.

The economy grew at a 3.4 percent rate in the third quarter of 2018. The next GDP report, for the fourth quarter, is due Jan. 30.

"We know that this economic expansion is likely in its closing acts," says Mark Hamrick, senior economic analyst at Bankrate.com. "What we don't know is how many more acts there are yet to come."
Copyright 2019 NPR. To see more, visit https://www.npr.org.