U.S. jobs growth remained solid in December as the economy added 292,000 jobs, beating expectations. Over the past three months, job gains have averaged 284,000 per month.
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For all of 2015, the USA added 2.7 million jobs, down from 2014’s 3.1 million.
In December, average hourly earnings for all employees on private nonfarm payrolls, at $25.24, changed little, declining only 1 cent, following an increase of 5 cents in November.
American employers added 292,000 jobs in December. The World Bank said this week that Mexico and emerging markets in Central America should fare better than the rest of South America due to their proximity to the healthier USA economy.
A steady or even increased unemployment rate, combined with a robust added jobs number, is especially heartening news in the current job market conditions.
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.
Wage growth is expected to accelerate by the middle of the year as the labor market settles into full employment. That’s down only modestly from the 260,000 average monthly increase in 2014, which marked the largest annual pace since 1999.
“The percentage of owners citing difficulty finding qualified workers as their “Single Most Important Business Problem” remained unchanged at 15 percent this month”, Mr. Dunkelberg said.
In a note to clients, Citi previewed today’s jobs report by calling it the “least important payrolls report in a while”. Or the rate of job growth will have to slow down to something closer to the rate at which the working-age population is growing (something below 100,000 jobs a month, versus the 220,000 jobs a month added in 2015). The company raised pay as much as 10 percent past year in those areas.
The employment gains that were made in December focused mostly on the services sector.
Last year, manufacturing added 30,000 net new positions, down sharply from 215,000 the previous year. Yet almost half a million people rejoined the labor force, a sign that more jobs were available.
The 93,671,000 Americans not in the labor force in 2015 are those individuals who did not have a job and did not actively seek one.
The mining industry lost 8,000 jobs. Wage growth is also important to consumption, which drives roughly two-thirds of US economic activity. “Still, with such a strong momentum in employment growth, the unemployment rate is likely to continue dropping in 2016”. Which reminds us, the labor participation rate for December clocked in at 62.6 percent – up from its 2015 low of 62.4 percent but still down for the year.
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“More jobs and stronger wage growth would provide a strong tailwind for consumer spending, which has been the economy’s principal source of growth”, said Zandi.
