U.S. added 292000 jobs in December

The Labor Department said Friday that the unemployment rate remained 5 percent for a third straight month. The Bureau also underestimated job growth for the months of October and November and has stated that there were an additional 50,000 jobs created during these months it previously did not account for.

“A meaningful pickup in wage growth is still the missing piece of the puzzle in this recovery”, said Paul Ashworth, economist at Capital Economics.

Still, average hourly earnings actually slid by a penny to $25.24. Still, average pay has risen 2.5 percent in the past year, only the second time since the Great Recession ended in mid-2009 that it’s reached that level.

US stock futures, which had been up sharply before the jobs report was released, rose further afterward. Payroll job growth in December was stronger at 292,000 jobs.

Oilfield services provider Schlumberger last month announced another round of job cuts in addition to 20,000 lay-offs already reported in 2015. One of the major weaknesses of the last few years has been labor force participation; even as joblessness has fallen, the percentage of Americans that have opted out of the labor force altogether (and therefore aren’t counted in the unemployment rate) has been stuck near its highest level in four decades. Prime-age EPOP is still under than halfway to its previous peak, a clear indication that numerous people we would expect to be working in a stronger economy are still on the sidelines.

Even so, the overall picture was similar to that of the members of the Fed’s policy body, the Federal Open Market Committee, when they decided on December 16 that the economy was resilient enough to handle a quarter percentage point increase in the near-zero federal funds rate, which should increase borrowing rates for consumers and businesses. 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.

The monthly report shows job growth continues to be positive while unemployment stays the same.

The employment gains this year were lead by Education and Health, Professional and Business Services, and Leisure and Hospitality industries.

There were some fears at the start of this year (and December) that the economy’s healthy was on the wayside, especially because there was some weakness expected in the manufacturing and export sectors due to global demand. The unemployment rate, obtained through a separate survey, held steady at 5% last month. The U.S. could also get hurt if the global economy takes a turn for the worse, particularly if China is hobbled. Sales of newly built homes jumped almost 15 percent in 2015 and helped spur building and construction hiring: Construction companies added 215,000 jobs a year ago, a 3.4 percent gain.

The civilian labor force participation rate, at 62.6%, was little changed in December and has shown little movement in recent months. The economy added an average of 221,000 jobs per month in 2015, and it came on strong at the end. Looked over a 12-month range, however, worker pay grew faster than the rate of inflation, in effect stretching workers’ earnings a bit further.

Consumer spending is up fueling growth and higher employment, he said.