WASHINGTON (REUTERS) - US employers hired the fewest workers in almost three years in December, but the setback was likely to be temporary amid signs that cold weather conditions might have had an impact.
Nonfarm payrolls rose only 74,000 last month, the smallest increase since January 2011, and the unemployment rate fell 0.3 of a percentage point to 6.7 per cent, the Labor Department said on Friday. The unemployment rate was the lowest since October 2008 and in part reflected people leaving the labor force.
The step back in hiring is at odds with other employment indicators that have painted an upbeat picture of the jobs market. The data showed that 38,000 more jobs were added in November than previously reported.
Construction employment fell for the first time since May and leisure and hospitality payrolls rose marginally, suggesting that cold weather in some parts of the country had held back hiring. There were also declines in government employment.
The smaller survey of households showed an increase in the number of people who stayed at home because of the bad weather.
Economists polled by Reuters had expected job gains of 196,000 jobs last month. But many pushed up their forecasts in the wake of upbeat labour market data during the week.
A string of data - from consumer spending and trade to industrial production - has suggested the economy ended 2013 on strong footing and is positioned to gain even more strength this year.
The change in the economy's fortunes, which gave the Federal Reserve confidence last month to start dialing back its massive monetary stimulus, reflects waning fiscal uncertainty after lawmakers in Washington agreed on a two-year budget.
The labour force participation rate, or the proportion of working-age Americans who have a job or are looking for one fell 0.2 of a percentage point to 62.8 per cent.
Annual revisions to the data from the Labor Department's survey of households, which is used to calculate the jobless rate, showed minor changes to the rate.
The U.S. central bank announced in December that it would trim its monthly purchases to US$75 billion (S$95 billion) from US$85 billion, and many economists expect it to decide on a similar-sized cut at its next meeting on Jan. 28-29.
Growth this year is expected to top 3 per cent, a sharp acceleration from the 1.7 per cent forecast for 2013.
Last month, government payrolls fell 13,000 after rising 15,000 in November.
Manufacturing employment rose for a fifth straight month.
The number of construction jobs fell 16,000.
Employment in the retail sector accelerated from November's seven-month low, which economists had blamed on a late Thanksgiving. There were also payroll gains in professional and business services.
Average hourly earnings rose two cents. The length of the workweek fell to 34.4 hours from 34.5 hours.