Almost 300,000 New Jobs in December

A job fair last month in Detroit.
A job fair last month in Detroit.
Photo By: Bloomberg

American employers added a robust 292,000 jobs in December, suggesting the U.S. economy is so far defying global weakness and growing solidly.

The strong figures underscore the resilience of the U.S. economy at a time of financial turmoil stemming from China's slowing economy and plummeting stock market. Most economists expect U.S. consumer spending to continue to offset any drag from overseas weakness, though many foresee only modest U.S. growth.

In its monthly jobs report this month, the Labor Department said the unemployment rate remained 5 percent in December for a third straight month. More Americans started looking for work and succeeded in finding jobs.

The government also said employers added a combined 50,000 more jobs in October and November than it had previously estimated. For the July-September quarter, hiring averaged 284,000 a month, the best three-month pace in a year.

The healthy job growth provided assurance that the economy remains stable despite struggling major countries around the world and falling stock markets. U.S. stock futures, which had been up sharply before the jobs report was released, rose further afterward.

"The economy is reflected most strongly in the jobs numbers—and it's doing OK, maybe better than OK," said David Berson, chief economist at Nationwide Insurance.

For all of 2015, employers added 2.65 million jobs, a monthly average of 221,000. That made 2015 the second-best year for hiring since 1999, after 2014's gain of 3.2 million jobs.

2015 went out with a megabang," says Patrick O'Keefe, director of economic research at accounting and consulting firm CohnReznick. "It speaks to the underlying strength of the domestic economy. The United States is intertwined with the international economy but to a far lesser degree than many other countries."

AVERAGE WAGES

Even as demand for workers grew, average hourly pay actually slipped a penny in December to $25.24 an hour. Still, average wages have risen 2.5 percent in the past year, only the second time since the Great Recession ended in mid-2009 that it has reached that level.

At the same time, pay growth remains below the roughly 3.5 percent pace typical of a healthy economy.

For months, U.S. employers have hired steadily even as global growth has flagged and financial markets have sunk. Stronger customer demand has given most businesses confidence to hire even though some sectors — notably manufacturing and oil and gas drilling — are struggling.

Still, stumbling growth in countries like China, the world's second-largest economy, and financial market turmoil might pose long-term challenges for the U.S. economy. A strong dollar and faltering global growth have already cut into exports of factory goods.

The dollar has climbed about 10 percent in value in the past year compared with overseas currencies. That has made U.S. goods more expensive globally while lowering the price of imported products.

In November, exports fell to their lowest level in nearly four years and shaved about 0.6 percentage point from the economy's growth in 2015, according to Goldman Sachs. Most analysts estimate that the economy expanded at a modest pace 2.5 percent last year.

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