And numerous new jobs were in higher-paying industries: Construction added 45,000, health care almost 53,000.
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The Bureau of Labor Statistics data also showed the jobless rate held at its seven-and-a-half year low of 5%.
The December report marks the US economy’s second-best year of job growth since 1999, adding roughly 210,000 new positions per month.
“The solid and stronger than expected employment gain in December further validates the Federal Reserve’s decision to hike rates during that month in response to signs of an improving domestic economy and shrinking labor market slack”, said RBC Economics Economist Nathan Janzen. The bad news in the report, if you can call it that, was that average hourly earnings were unchanged, but given the very low inflation, American workers have still seen meaningful improvement in earnings power over the a year ago – a 2.5 percent rise in hourly earnings against a backdrop of almost zero inflation.
USA manufacturers added 30,000 jobs past year, a marked decline from 2014. US short-term interest rate futures fell.
For all of last year, payrolls climbed by 2.65 million after 3.1 million in 2014 for the best back-to-back years for hiring since 1998-99. “We expect the Fed to move at the March meeting”, said Commerzbank economist Christoph Balz. “The evidence for this process still needs to be broadly confirmed, however, as average hourly earnings gains changed little this month and are running at a reasonable, but not impressive 2.5 percent year-over-year”. That means October and December were the two strongest months of the year and that the final quarter of 2015 was sizzling for the jobs market. The stock market has had a rough week largely thanks to volatility in China and dips for a few major United States companies, including Apple and restaurant chain Chipotle. Workers in the energy industry, meanwhile, have been crushed by the continued slide in the price of oil. We’re close to what many economists consider the “natural rate” of unemployment, particularly since other measures of labor market slack have been falling.
Yet some economists were skeptical of the figure, because many companies don’t drop laid-off workers from their payrolls until the end of the year.
The U.S. labor market remains on fire. The EPOP for African Americans rose by 0.5 percentage points in December as the unemployment rate fell from 9.4 to 8.3 percent. Temporary help increased 34,400 last month and government payrolls rose 17,000. October’s was upgraded to 307,000 from 298,000, and November’s, to 252,000 from 211,000. That caused the participation rate to tick up a tenth of a point to 62.6 percent.
The services sector added 247 jobs, up from 213 jobs in November.
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While unemployment has fallen, nominal wage growth, the prime-age employment-to-population (EPOP) ratio, and the labor force participation rate are all lagging. Still, stumbling growth in countries like China, the world’s second-largest economy, and financial market turmoil might pose long-term challenges for the USA economy.
