Job gains in the October-December quarter averaged 284,000, the best three-month increase since last January.
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Nonfarm payrolls increased by 292,000 last month, the Labor Department announced on Friday. “Meantime, the unemployment rate stands at its lowest point in more than seven years”. The unemployment rate hasn’t been below that mark since 2007.
The average hourly wage rose 2.2 percent in 2015, up from 2.1 percent the prior two years and 1.9 percent in 2012. High levels of long-term unemployed workers and part-time workers in recent years are partially why wage growth has been so sluggish.
Still, hiring trends look solid against the backdrop of global turbulence.
That number has now been revised upward, to 252,000. Job gains occurred among specialty trade contractors (+29,000) and in construction of buildings (+10,000). That’s down only modestly from the 260,000 average monthly increase in 2014, which marked the largest annual pace since 1999.
USA franchise employment grew by 48,600 jobs in December, including 8,400 in auto parts stores and dealerships, ADP said. More people found full time jobs. Construction added 45,000 jobs, for a total of 263,000 over the year (compared to 338,000 in 2014).
On the back of the data, Bill Gross from Janus Capital told Bloomberg TV he was sceptical that the Fed could raise interest rates three or four times in 2016 given the levels of indebtedness in the economy. Steady hiring and unemployment supports that view. Since inflation has remained even lower, workers are seeing some real wage growth even if it doesn’t feel like much.
Beth Ann Bovino, U.S. chief economist at Standard & Poor’s Ratings Services, said the actions the U.S. government took amid the financial meltdown in 2008 are still paying off and should continue to shield the slow and steady recovery this year from the global weakness. “Wages for production and nonsupervisory workers increased 2.4% in December from a year earlier”. Friday’s jobs report confirms this contracting in manufacturing. Just this week, stock markets around the world panicked on fears that the global slowdown – led China and falling oil prices – is worsening.
December’s employment growth is excellent news.
“The U.S. economy is heading into 2016 with domestic and global forces pulling in different directions”, according to the written assessment of HSBC Securities.
Professional and business services, construction, health care, and food services all saw job increases.
But evidence of China’s troubles showed up in the 8,000 jobs lost in mining and logging.
Employment in transportation and warehousing rose by 23,000 in December, with a gain of 15,000 in couriers and messengers, the report said. They added 73,000 jobs, though nearly half were temporary. Those layoffs may continue if oil prices stay low.
And the new jobs were spread across many industries.
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The labor force expanded in December. When jobs are added, people have more money in the wallets to spend, and American consumers are the major engine behind USA economic growth. US short-term interest rate futures fell.
