United States scores big with 292000 new jobs in December

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

Manufacturing, a sector feeling the brunt of an export slowdown tied to a stronger dollar, added 35,000 jobs during 2015 after adding more than 200,000 in 2014. In 2014, the economy added 3.1 million jobs.

Unemployment remained steady at 5 percent, where it has been for the past three months (at its lowest rate in more than seven years), and average hourly earnings increased by 2.5 percent.

That’s certainly not what the U.S. Federal Reserve was expecting after it raised interest rates last month. Another strong category: construction, which added 45,000 jobs. In the USA, “people are finding jobs and getting paid more for them”. In a really strong economic boom – the kind we enjoyed in the 1990s, for example – we should be seeing workers’ wages growing much faster than the inflation rate, producing real increases in people’s standard of living. “It’s extraordinary to see such rapid jobs growth, and increasingly low unemployment, with no inflationary pressures at all”, said Brookings Institution senior economist Justin Wolfers in a tweet. Still, average pay has risen 2.5 per cent in the past year, only the second time since the Great Recession ended in mid-2009 that it has reached that level. A tighter labor market should lead to better paychecks and ultimately stoke consumer inflation.

But job growth was accelerating as 2015 closed.

Oilfield services provider Schlumberger last month announced another round of job cuts in addition to 20,000 layoffs already reported in 2015. Unemployment has remained at roughly 5 percent since September. “Now with this morning’s strength in the jobs report, at least some of those fears have been put to rest”.

This news follows last month’s report that jobs jumped to 211,000, which gave the final confirmation that the Fed would likely raise rates. Employment in the professional and business services sector increased by 73,000 in December, with temp help services accounting for 34,000 of the gain. Many people say they want a job but haven’t actively looked for one recently (those “marginally attached” to the labor force) or have a job but aren’t working as many hours as they’d like. While it is sharpest among less educated workers, there was a drop in employment rates of 1.6 percent among prime-age workers with college degrees and 1.7 percentage points among prime-age workers with advanced degrees.

The mining sector lost 8,000 jobs in December, while employment in manufacturing continued to stagnate. USA short-term interest rate futures fell.

A big question for the year ahead is whether the breakneck pace of job growth of the last two years can continue now that the jobless rate is close to what economists consider full employment. And restaurants and bars added 37,000 in December.