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 Nonfarm payrolls increased 252,000 last month after a revised
353,000 jump in November, the Labor Department said on Friday. The
unemployment rate fell 0.2 percentage point to a 6-1/2 year low of
5.6 percent. However, some of the decline reflected people leaving
the labor force.
December marked the 11th straight month of payroll increases above
200,000, the longest stretch since 1994. With October's count also
revised higher, the economy created 50,000 more jobs than previously
reported in the prior two months.
Economists polled by Reuters had expected employment to increase
240,000 in December and the unemployment rate to fall one-tenth of a
percentage point to 5.7 percent.
The sturdy job gains added to robust third-quarter growth data, as
well as solid November industrial production and retail sales
reports, in suggesting the economy would weather turbulence in
Europe, Japan, China and some emerging markets.
But a five cent drop in average hourly earnings after rising six
cents in November, took some shine off the report.
Wage growth has been frustratingly tepid and economists believe the
Federal Reserve will be hesitant to pull the trigger on raising
interest rates without a significant increase in labor costs.
The U.S. central bank has kept its short-term interest rate near
zero since December 2008.
It has not raised interest rates since 2006, but recently signaled
it was moving closer to hiking, even if inflation remains below the
Fed's 2.0 percent target. Most economists expect the first rate
increase in June.
But an acceleration in wage gains is in the cards as the labor
market continues to tighten.
That, together with lower gasoline prices are expected to provide a
tail wind to consumer spending this year.
The bigger survey of employers showed job gains in 2014 were the
largest since 1999.
The smaller household survey data from which the unemployment rate
is derived was revised back five years. The revisions showed no
material shift in the trend.
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The unemployment rate dropped 1.1 percentage points in 2014.
Most of the measures tracked by Fed Chair Janet Yellen to gauge the
amount of slack in the labor market continued to point to tightening
conditions in December.
A broad measure of joblessness that includes people who want to work
but have given up searching and those working part-time because they
cannot find full-time employment, fell two-tenths of a percentage
point to 11.2 percent, the lowest since September 2008.
The ranks of the long-term unemployed continued to shrink in
December. But the labor force participation rate fell to 62.7
percent from 62.9 percent in November.
Job gains in December were dispersed across all sectors. Private
payrolls rose 240,000, with construction employment up 48,000, the
largest rise since January. Manufacturing payrolls rose 17,000.
Government employment increased 12,000 last month. The average work
week was steady at a 6-1/2 year high of 34.6 hours.
(Reporting by Lucia Mutikani)
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