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December’s Jobs Report Blows Past Expectations

Pace Of Job Growth Slows Down, 7.8 Unemployment Rate Remains UnchangedPace Of Job Growth Slows Down, 7.8 Unemployment Rate Remains Unchanged
A 'now hiring' sign in the window of a Chase bank branch in San Rafael, Calif.Photograph by Justin Sullivan—Getty Images

The U.S labor market is still on a tear.

The American economy added 292,000 new jobs in December, with the unemployment rate remaining steady at 5%, according to data released by the Labor Department Friday. Revisions to previous months’ estimates found that the U.S. economy has 50,000 more jobs than previously thought.

Employment growth was strong across almost all sectors, with construction and professional and business services showing particular strength. The one sector that saw losses, mining, reflects the weak state of the oil and commodities industry.

December’s strong numbers, plus the revisions to previous months, put average monthly job growth for 2015 at a robust 221,000. While that’s less than last year’s average of 260,000, it’s still the second-best showing since 1999.

One sour note found in the report was that average hourly earnings remained flat month over month, though they have grown 2.5% over the year. This indicator is watched very closely by Janet Yellen and Federal Reserve, as they continue to decide the pace at which interest rates will rise. Faster wage growth, all else equal, would warrant higher interest rates as the Fed seeks to keep a lid on inflation.

As you can see from the chart above, wage growth has been slow, but moving in the right direction overall: