US added strong 292K jobs last month; jobless rate at 5 pct

The U.S. labor market in December managed to generate 292,000 new positions, according to a report released Friday by the Bureau of Labor Statistics.

American employers added a strong 292,000 jobs in December, suggesting that the USA economy is so far defying global trends and growing at a solid pace.

Industries that are focused on domestic, rather than overseas, demand also hired robustly in December: Construction added 45,000 jobs, likely in part because of unusually warm weather.

October and November payrolls were revised to show 50,000 more jobs created than previously reported, adding to the report’s upbeat tone.

Economists, who had slashed fourth-quarter growth forecasts on recent soft economic data, had expected USA payrolls to increase by only 200,000 jobs last month.

The dollar has struggled to extend gains against major currencies in 2016 as fresh concern that China’s slowdown will hamper global growth had wiped $2.5 trillion off the value of global equities this year.

In November, exports fell to their lowest level in almost four years and shaved about 0.6 percentage point from the economy’s growth in 2015, according to Goldman Sachs. The number of long-term unemployed – those unable to find a new jobs after searching for 27 weeks or more – was unchanged at 2.1 million.

Among the service providing industries, the food services and drinking places segment had a strong year, adding 357,000 jobs in 2015.

This week, the International Monetary Fund downgraded its estimate of world economic growth for this year. A certain amount of unemployment is healthy for an economy, because workers should feel confident leaving a job or entering the job market to look for work.

Jobs in the mining sector, however, continued to fall and were off 15% from a year ago, with this sector losing 8,000 jobs in December and 129,000 in 2015.

The bulk of US employment gains past year occurred in private service industries. The participation rate in the labor market remained at a low 62.6%, compared with more than 66% before the recession.

It was the first year of annual job losses since 2009 at the height of the global financial crisis and the biggest decline in employment since 1986.

The surge in employment is certain to be welcomed by hawks at the Federal Reserve who call for another interest rate hike after the one on December 16. “We ought to see a broader pickup in wage growth this year”. The 2.7 million jobs the Labor Department said were added previous year, then, didn’t keep pace with the growth of the population. We’re close to what many economists consider the “natural rate” of unemployment, particularly since other measures of labor market slack have been falling.

The average work week for all workers held in December at 34.5 hours. Only in 2014, when the nation’s payroll expanded monthly by an average of 260,000, was the mark higher.