Washington (AFP) – The US economy capped a strong year of jobs growth with stellar December data, demonstrating resilience amid slowing global growth, China’s turmoil, and the steep decline of the oil sector.
The Labor Department said Friday that employers added 292,000 new jobs last month, a year-end surge that was far better than expected.
It took total jobs created during the year to 2.65 million, the second-best year, after 2014, since the 1990s.
The report was seen as a good sign for the US economy which is proving to be an island of strength as Europe and Japan continue to struggle and emerging-market economies, led by China, head downward.
While the official unemployment rate held at 5.0 percent, and wage gains remained tepid at 2.5 percent year on year, the report supported the Federal Reserve’s view that the employment sector was tightening fast enough to justify it raising its benchmark interest rate last month for the first time in over nine years.
The jobs report also demonstrated that expectations of small hikes in the central bank’s federal funds rate had not caused employers to hold off recruiting new workers when they need them.
Hiring was solid across the board, led by construction, professional and business services, and health care.
While the mining sector continued to shed jobs, primarily due to the collapse in crude-oil prices, even the government was picking up the slack with expanded hiring.
The data suggested an increase of workforce dropouts returning to the labor market, though there were still some signs of weakness.
The number of long-term unemployed — those unable to find a new jobs after searching for 27 weeks or more — was unchanged at 2.1 million.
The number of people forced to work part time because they cannot find full-time jobs held steady at 6.0 million.
And the participation rate in the labor market remained at a low 62.6 percent, compared with more than 66 percent before the recession.
– Markets still wary –
“You’ve got plenty of things to contemplate heading into the weekend,” said Art Hogan, chief market strategist at Wunderlich Securities. “It’s not an environment that would manifest a lot of long investing.”
The overall picture of the jobs data was similar to that of the members of the Fed’s policy body, the Federal Open Market Committee, when they decided on December 16 that the economy was resilient enough to handle an increase in the federal funds rate, which should increase borrowing rates for consumers and businesses.
“Today’s job numbers should be soothing to the FOMC, to markets, and to workers, and stand in sharp contrast to the negative economic news emanating from China,” said Beth Ann Bovino, chief US economist at Standard & Poor’s Ratings Services.
“Markets are desperate for good news, and now have it, but it comes with a caveat because better employment growth means the Fed will raise rates faster…. People are finding jobs and getting paid more for them.”
Still, not all analysts saw the data as sterling. Economist Robert Reich, a former Labor Department secretary, said the jobs added are mostly low-wage positions which helped to keep the average of hourly wages flat.
“We’ve got in the habit of looking only at the number of jobs created, rather than what they pay or how secure they are,” he said.
“Today’s report shows that low pay and growing job insecurity continue to undermine the American workforce.”