Dec employment gain caps best year since 1999

Washington

EMPLOYMENT rose more than forecast in December and the jobless rate declined to 5.6 per cent, wrapping up the best year for the labour market since 1999 and adding to evidence the US is a standout in the global economy.

The addition of 252,000 jobs followed a 353,000 rise the prior month that was more than previously estimated, a Labour Department report showed on Friday in Washington. The report wasn't all good news as earnings unexpectedly declined from a month earlier.

An additional 2.95 million Americans found work in 2014, the most in 15 years and a sign companies are optimistic US demand will persist even as overseas markets struggle. The combination of job growth and cheaper petrol will probably help stretch workers' paychecks and sustain consumer spending.

"We have continued solid job growth," said Michael Feroli, chief US economist at JPMorgan Chase & Co in New York, who projected a 240,000 gain. "It shows really solid momentum in US growth. There are not a lot of places in the world where we see that these days. The oddity in the report is the move down in average hourly earnings."

Job growth last month was highlighted by the biggest gain in construction employment in almost a year. Factories, health care providers and business services also kept adding workers in December.

The median forecast in a Bloomberg survey of economists called for a 240,000 advance in payrolls. Estimates of 99 economists ranged from gains of 160,000 to 305,000 after a previously reported 321,000 November increase.

Revisions to prior reports added a total of 50,000 jobs to overall payrolls in the previous two months.

The participation rate, which indicates the share of working-age people in the labour force, decreased to 62.7 per cent from 62.9 per cent. Average hourly earnings for all employees dropped by 0.2 per cent, the biggest since comparable records began in 2006, to US$24.57 from the prior month. Earnings rose 0.2 per cent in November. They increased 1.7 per cent over the 12 months ended in December, the smallest gain since October 2012.

In accordance with usual practice, the December jobs report also incorporated annual revisions in seasonally adjusted household survey data. Figures for January through November showed very little change from previous estimates.

Stronger employment growth underscores the US economy's resilience in the face of cooling markets that stretch from Europe to China.

Federal Reserve policymakers last month noted the improvement in the job market that's underpinning growth in the sixth year of the expansion.

"Underutilisation of labour resources continues to diminish," the officials said in a statement after their December meeting. They also said they will be "patient" on the timing of the first interest-rate increase since 2006. Minutes of the meeting released on Jan 7 showed that being deliberate on interest rates means no increase before late April. Bloomberg