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US jobs growth slows in December US jobs growth slows in December
(about 1 hour later)
The US economy added a lower-than-expected 145,000 jobs last month, the latest official figures have shown. The US economy added 145,000 jobs last month, capping a year of solid but slowing growth, official figures show.
The figure marks a slowdown from November's figure of 256,000, when the statistics were boosted by striking GM workers returning to work. Hiring at retail and health care firms drove the gains, which pushed the US labour market to a 10th year of expansion.
The data for October and November was revised down to show 14,000 fewer jobs were created than previously estimated. While the country's 3.5% unemployment rate remained at historic lows, earnings growth slowed from November.
The unemployment rate remained unchanged at 3.5% in December, according to the US Labor Department. The average hourly wage rose at an annual rate of 2.9%, down from November's rate of 3.1%.
The monthly jobs gain was lower than the 164,000 predicted by analysts, while earnings growth also slowed. December's job gains mark a slowdown from the prior month, when employers added 256,000 positions.
Average hourly earnings rose at an annual rate of 2.9% last month, down from November's rate of 3.1%. Analysts had expected a slightly stronger performance last month, predicting an increase of about 164,000. But they said Friday's report from the US Labor Department showed that the US economy remained solid, despite fears of a slowdown.
The sectors seeing the biggest gains in jobs last month were retailing, which added 41,000 jobs, and health care, which saw an increase of 28,000.
The number of manufacturing jobs fell by 12,000, compared with a rise of 58,000 in November when the GM strike ended.
"The key point here is that payroll growth is performing far better than implied by a host of leading indicators in late summer and fall," said Ian Shepherdson, chief economist at Pantheon Macroeconomics."The key point here is that payroll growth is performing far better than implied by a host of leading indicators in late summer and fall," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"Businesses appear to have over-estimated the real impact of the trade war, distorting their survey responses. Payroll gains averaged a very solid 184,000 in Q4, and we have no reason to expect much change in Q1. The US economy expanded at an annual rate of 2.1% in the third quarter, down sharply from the 3.1% rate reported earlier in the year.
"If we're right, the unemployment rate will keep falling, heading towards 3% by the end of the year." Trade tensions, declines in manufacturing and weakness abroad had sparked fears of a slowdown. But consumer spending - the main driver of the US economy - has remained steady, buoyed in part by the tight labour market.
Over the year, the US added an average of 176,000 jobs per month, compared to 223,000 in 2018, when economists say a sharp tax cut bolstered growth. The figures remain above the level necessary to meet growth in the labour force.
"We have no reason to believe that a recession is imminent," said Mark Hamrick, senior economic analyst at Bankrate.com. "But we're also reminded that the economic expansion is long in the tooth and will end at some point."
Analysts warned that the retail sector's burst of hiring last month was likely to be temporary. Many national chains, including Macy's and Sears, have already announced store closures on the back of weak holiday sales.
The number of manufacturing jobs also fell by 12,000, compared with a rise of 58,000 in November, which coincided with the end of a labour strike at General Motors.
The Labor Department also revised down data for October and November to show 14,000 fewer jobs were created than previously estimated.
Pay gains also remain unusually muted, given the low unemployment rate, in part reflecting that many of the new positions are in low paying fields.
The benign pay growth suggests the Federal Reserve is not likely to cut interest rates again anytime soon, said Wells Fargo economist Jay Bryson.
"Although not quite as strong as a year ago, this pace of gains is solid," he said. "Policymakers at the Federal Reserve likely will look at today's data and conclude that there is no compelling reason to change monetary policy."