The nation’s payrolls increased by 292,000 jobs in December, eight years after the beginning of the 2007 recession that crippled America’s economy. For all of 2015, employers added 2.65 million jobs at a monthly average of 221,000.
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The Fed last month raised overnight interest rates by a quarter percentage point to between 0.25 and 0.50 per cent, the first increase in almost a decade, and a subsequent move at its next meeting this month was already seen as off the table. Wages for production and nonsupervisory workers increased 2.4% in December from a year earlier.
The strong performance “should put (to rest) to any fears that the USA recovery is in serious difficulty”, economist Paul Ashworth of Capital Economics wrote in a note to clients.
A strong, steady 2015 for the United States labor market ended with a bang in December. The reason why more jobs were added but unemployment didn’t go down is that more people are entering the labor force to look for jobs. “It’s extraordinary to see such rapid jobs growth, and increasingly low unemployment, with no inflationary pressures at all”, said Brookings Institution senior economist Justin Wolfers in a tweet. Construction added 45,000 posts and health care employment continued its steady climb, rising by another 39,000 jobs. A similar scenario appeared to play out in August and September, when payroll growth slumped before rebounding strongly the next two months.
The better-paying white-collar category of professional and business services led all sectors, adding 73,000 jobs in December.
Whether economic growth this year is modest or exceeds expectations may come down to the degree of wage growth. Yet it makes up just 10 percent of the US economy and oil and gas drilling even less. The industry cut back 8,000 jobs in December for a total of 130,000 jobs lost for all of 2015.
The airline industry gained 900 jobs in December, going from 438,800 in November to 454,700 last month.
The last time that many Americans had to work more than one job to make ends meet? Whether it’s how to raise interest rates or rejecting the job-killing [Trans-Pacific Partnership], we must ensure that policies aren’t pushed that benefit giant corporations at the expense of working people.
Among the service providing industries, the food services and drinking places segment had a strong year, adding 357,000 jobs in 2015.
The biggest disappointment in Friday’s report was a slight reversal of wage growth. This month we saw the participation rate tick-up and if employment continues to grow that this rapid pace, we will likely see more workers coming off the sidelines and back into the labor force, leaving the unemployment rate steady for the foreseeable future. The rate remains near a 40-year low. The unemployment rate, at 5 percent, is at or near what many economists consider the economy’s natural long-term floor.
There are concerns that persistently low participation could hamper job growth as the supply pool shrinks, unless a pick-up in earnings entices more Americans to return to the labor force.
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Retail payrolls are a wild card as mild temperatures hurt sales of winter apparel.
