The U.S. labour market continues to build momentum as December’s job growth once again managed to handily beat expectations, according to the latest employment data from the Labour Department.
Friday, the Bureau of Labuor Statistics said 292,000 jobs were created in December. Last month's jobs gains were well above November's upwardly revised report of 252,000 jobs; the previous report pegged the job growth at 211,000. Ahead of the report, consensus forecasts were calling for job gains of around 200,000.
October's employment data was also revised higher to 307,000 jobs, up from the previous estimate of 298,000.
"Over the past 3 months, job gains have averaged 284,000 per month," the report noted.
Along with the broad-based job growth, the unemployment rate held steady at 5.0%, in line with expectations. the report noted that the participation rate was little changed at 62.6% last month.
Despite the growing labor market, wages were stagnant last month. The report said that average hourly wages were $24.24, down one cent from November; however, the report noted that the decline came after November's five-cent rise.
"Over the year, average hourly earnings have risen by 2.5 percent," the report said.
The mining sector also continues to see further declines in employment. According to the report 8,000 jobs were lost in the sector. In total 129,000 jobs were lost in the mining industry in 2015, with most of the losses in support activities.
Although the headline employment numbers helps to support the Federal Reserve’s view that “underutilization” in the labor market is diminishing, some economists are focusing on the lack of wage growth, something that is needed if the central bank is going to hit its 2.0% inflation target.
“We may be moving into 2016 but the general theme of strong job gains but still tame wage pressures remains,” said Andrew Grantham, senior economist at CIBC World Markets. “The strength of the job gains should keep the Fed on track for one more hike in interest rates in March should financial market volatility subside, but signs of inflation picking up will likely be needed to convince more dovish members to support further hikes beyond that.”
Ryan Littlestone, currency strategist at Forexlive added that the lack of wage growth could take some steam out of the U.S. dollar.
By Neils Christensen |
