- Elise Gould, Economic Policy Institute
Unemployment in the world number one economy ticked lower in December, opening the door wider to an interest rate hike from the Fed this year despite a sluggish global economic growth. Thus, the US marked the best year for hiring in 15 years with a robust job gain in December and the unemployment rate falling to the lowest level in six years. According to the Labor Department, US employers added 252,000 jobs in December, pushing the jobless rate to 5.6% down from 5.8%. Job gains were broad-based, with private payrolls surging 240,000 and US government employment increasing 12,000. November's non-farm payroll data was revised upwards to show 353,000 jobs were created. December marked the 11th consecutive month of payroll rise above 200,000, the longest stretch since 1994. Yet wage growth remains subdued and some economists expect the Fed to be hesitant to pull the trigger on lifting interest rates without a significant growth in labor costs. Average hourly pay dropped 5 cents. Moreover, the jobless rate fell partly due to the fact that many of the unemployed gave up looking for work, as the labour force participation rate dropped to 62.7% from 62.9% in November.
The solid job gains added to strong third-quarter growth data, as well as solid November industrial output and retail sales reports, in suggesting the US economy would withstand turbulence in Europe, Japan, China and some emerging markets.
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