December brings cheer for 292,000 more US workers

For all of last year, payrolls in the US climbed by 2.65 million after 3.1 million in 2014 for the best back-to-back years for hiring since 1998-99. The jobless rate in December held at 5 per cent, and wage growth rose less than forecast from a year
For all of last year, payrolls in the US climbed by 2.65 million after 3.1 million in 2014 for the best back-to-back years for hiring since 1998-99. The jobless rate in December held at 5 per cent, and wage growth rose less than forecast from a year earlier.PHOTO: REUTERS

WASHINGTON • Payroll growth in the US surged in December, capping the second-best year for American workers since 1999 and further evidence of a resilient job market that prompted the Federal Reserve to raise interest rates.

The 292,000 gain exceeded the highest forecast in a Bloomberg survey and followed a 252,000 increase in November that was stronger than previously estimated, a Labour Department report showed yesterday.

The jobless rate held at 5 per cent, and wage growth rose less than forecast from a year earlier. Such job market durability indicates employers were sanguine about the economy's prospects just before the recent rout in global financial markets.

Fed policymakers are counting on tighter labour conditions to lead to broader increases in worker pay and inflation. "Job growth is solid," Mr Joshua Shapiro, chief US economist at Maria Fiorini Ramirez in New York, said before the report. "The labour market will remain supportive of consumer spending. We ought to see a broader pickup in wage growth this year."

The December job gains, which were probably helped by mild winter weather across much of the country, were led by temporary- help services, healthcare, transportation and construction.

Labour Department revisions to prior reports added a total of 50,000 jobs to payrolls in the previous two months.

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. The jobless rate, which is derived from a separate poll of households, matched the median forecast.

Employment over the final three months of 2015 rose 284,000 on average, the most since January 2015. Hiring gains last month were broad, with construction adding 45,000 jobs, healthcare providers taking on 52,600 and temporary- help services boosting headcounts by 34,400. Factories added the most jobs - 8,000 - in five months.

Minutes of the Fed's December meeting, when policymakers boosted their target rate for federal funds, showed participants acknowledged the improvement in labour market conditions. Many judged it as "substantial".

"Members agreed that a range of recent labour market indicators, including ongoing job gains and declining unemployment, showed further improvement and confirmed that underutilisation of labour resources had diminished appreciably since early this year," according to the minutes.

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A version of this article appeared in the print edition of The Straits Times on January 09, 2016, with the headline 'December brings cheer for 292,000 more US workers'. Print Edition | Subscribe