The labor market ended 2015 on a roll as employers added a
blockbuster 292,000 jobs last month, underscoring that the U.S. economy
remains on solid footing despite weakness in China and this week’s brutal
market selloff. The unemployment rate was unchanged at 5%, the Labor
Department said Friday. Economists surveyed by Bloomberg expected 200,000
job gains, according to their median forecast. Businesses added 275,000 jobs,
led by professional and business services, healthcare and construction..
Federal, state and local governments added 17,000. In another positive
sign, job gains for October and November were revised up by a total
50,000. October’s was upgraded to 307,000 from 298,000, and November’s, to
252,000 from 211,000.
Many economists expected the December tally to be somewhat
inflated by unusually warm weather that could have spurred hiring by construction
firms, restaurants and retailers. Construction, in fact, added 45,000
jobs last month and 128,000 in a fourth quarter characterized by generally
balmy temperatures across much of the country. And restaurants and bars added
37,000 in December. Still, the economy gained a healthy average of 221,000
jobs a month in 2015. In 2014, 260,000 new jobs a month were created, though
that marked a 15-year high.
At the same time, manufacturers and oil companies shed
thousands of jobs last year and global forces continue to buffet those
industries. A weak overseas economy and strong dollar that makes U.S.
exports more expensive for foreign buyers has hammered factories already
reeling from plunging oil prices that have curtailed energy projects. The
mining industry cut 8,000 jobs in December. Manufacturers added 8,000 in a
possible the sector will at least be more stable this year. As a result of
the headwinds, many analysts estimate the economy grew just above 1% in the
fourth quarter, less than half the average pace in the 6 1/2 year old recovery.
But while business investment has suffered, American
consumers have been buoyed by rising home prices, strong job growth, cheap
gasoline and reduce household debt. And since consumer spending makes up more
than two thirds of economic activity, it, along with the recovering housing
market, underpinned last year's sturdy job growth. Besides the
strong gains by construction companies and eateries, professional and business
services added 73,000 jobs last month; healthcare, 39,000; and transportation
and warehousing, 23,000.
One lingering cause for concern is that average hourly
earnings rose just 1 cent to $25.24, and are up 2.5% the past year. While
that’s faster than the modest 2% or so pace so far in the recovery, the
gain was inflated by an unusual drop in pay in December 2014.The Federal
Reserve, which raised interest rates last month for the first time in nearly a
decade, is looking for a pickup in wage growth as a sign of accelerating
inflation, providing policymakers more confidence to continue to hike rates in
Economists had said a weak showing in December could signal
that the global turmoil was shaking business confidence and hiring. A similar
scenario appeared to play out in August and September, when payroll growth
slumped before rebounding strongly the next two months. Back then, reports
about China’s economic slowdown sent stocks tumbling, as they have in recent
Other labor-market indicators, though, have been
encouraging. Payroll processor ADP estimated that businesses added a
better-than-expected 257,000 jobs in December and an index of service-sector
activity showed a pickup in hiring. Initial jobless claims, a reliable
barometer of layoffs, hovers at prerecession levels. At the same time, measures of manufacturing employment,
online job ads and auto sales declined last month, leading some
analysts to predict that job growth slowed.
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