US hiring tops forecasts, jobless rate falls as wage gains slow

Softening in the labour market remains a goal for the Federal Reserve as it battles inflation. PHOTO: AFP

NEW YORK - Job growth in the United States exceeded expectations in December, the unemployment rate fell, and wage gains slowed more than anticipated, suggesting some modest easing in inflation pressures.

Non-farm payrolls increased by 223,000 in December, capping a near-record year for job growth, a Labour Department report showed on Friday. The advance followed a revised 256,000 gain in November.

Average hourly earnings rose 0.3 per cent from a month earlier and 4.6 per cent from December 2021 after a downward revision to November figures.

The deceleration is likely welcome news for Federal Reserve officials, who see wage pressures, particularly in the service sector, as a key hurdle to achieving their 2 per cent inflation goal.

The unemployment rate decreased by 0.1 percentage point to 3.5 per cent, as participation inched higher.

The median estimates in a Bloomberg survey of economists had called for a 203,000 advance in payrolls and for wage growth to moderate to a 0.4 per cent monthly pace.

Softening in the labour market remains a goal for the Fed as it battles inflation. Market pricing for US interest rates to peak in June rose to above 5 per cent following comments from Atlanta Fed president Raphael Bostic, who said the central bank still has much work to do to tame inflation.

St Louis Fed president James Bullard, who is no longer a voting member of the Federal Open Market Committee, said rates were approaching a sufficiently restrictive zone and that inflation expectations had retreated, offering investors some optimism.

Futures contracts on the S&P 500 and the Nasdaq 100 rose. BLOOMBERG

Join ST's Telegram channel and get the latest breaking news delivered to you.