The daily business briefing: January 4, 2019
Stock futures lifted by China's announcement on trade talks, December jobs report far exceeds expectations, and more
- 1. Stock futures rise after China announces start of trade talks
- 2. U.S. adds 312,000 jobs in December, trouncing expectations
- 3. House votes to reopen government without funding Trump's wall
- 4. ObamaCare enrollments remain steady despite ruling against health law
- 5. U.S. factory activity expansion slows
1. Stock futures rise after China announces start of trade talks
U.S. stock index futures jumped early Friday after China's commerce ministry said high-level U.S.-China trade negotiations would start in Beijing next week, lifting hopes of easing tensions, although they retreated from highs after the strong December jobs report raised concerns about further interest-rate hikes. The fluctuations followed a Thursday market dive led by technology stocks dragged down by Apple's report that iPhone sales were falling more than expected in China. Apple's warning deepened fears about slumping growth in China, the world's No. 2 economy, and the likelihood that President Trump's trade war with Beijing was making matters worse. The Dow Jones Industrial Average sank by 660 points or 2.8 percent. The broader S&P 500 index fell by 2.5 percent and the tech-heavy Nasdaq Composite dropped by 3 percent. Apple fell by nearly 10 percent, its worst day since 2013.
2. U.S. adds 312,000 jobs in December, trouncing expectations
U.S. employers added 312,000 non-farm jobs in December, far exceeding forecasts, according to a Friday report from the Labor Department. Economists surveyed by MarketWatch had expected a 182,000 increase, on average. Despite the gains, the unemployment rate rose to 3.9 percent from 3.7 percent as 419,000 more people entered the labor force searching for work. A broader measure of unemployment that takes into account discouraged workers and those doing part-time jobs for economic reasons remained at 7.6 percent. Wages increased by 0.4 percent over the previous month, and 3.2 percent from a year ago, tying October for the best year-over-year increase since April 2009. The job gains showed that the economy remains strong despite growing concerns of a global slowdown.
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3. House votes to reopen government without funding Trump's wall
Hours after taking control of the House on Thursday, Democrats passed a package of bills seeking to end the partial government shutdown without providing money for President Trump's border wall. The House first voted 239-192 to fund the Department of Homeland Security through Feb. 8, with five Republicans joining Democrats. Next lawmakers voted 241-190 to provide funding for the full year to other departments. The White House and GOP leaders said that without the $5 billion Trump is demanding for the wall, the spending package is dead on arrival in the Republican-controlled Senate. The White House has invited congressional leaders to a meeting on ending the shutdown on Friday, but no breakthrough is expected.
4. ObamaCare enrollments remain steady despite ruling against health law
About 8.4 million Americans have signed up for health-care coverage for this year under the Affordable Care Act, the Centers for Medicare and Medicaid Services reported Thursday. The numbers reflect steady enrollment in the 39 states served by the federal government's HealthCare.gov website despite a court ruling that declared President Obama's signature health-care reform law unconstitutional now that Republican lawmakers have scrapped penalties for violations of the individual mandate to buy coverage. Democratic-led states announced Thursday that they are appealing the ruling by a conservative federal judge in Texas, who said the law will remain in effect until appeals are exhausted.
5. U.S. factory activity expansion slows
U.S. manufacturing activity grew slower than expected last month, falling to its lowest level since November 2016, the Institute for Supply Management reported Thursday. The ISM manufacturing index fell to 54.1 in December, down from 59.3 in November and short of the 57.9 reading expected. "Comments from the panel reflect continued expanding business strength, but at much lower levels," Timothy Fiore, chair of the Institute for Supply Management, said in statement. "This is grim," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a research note. "The story here is that the trade war, coupled with China's underlying slowdown, is wreaking havoc in both countries."
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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