Despite a sluggish overall economic output, employers in the US added a solid 292,000 jobs last month, indicating that the country’s resilience at a time of slow global growth and financial turmoil. The Labor Department on Friday said that the unemployment rate stayed at five percent.
An average of 284,000 jobs was added during October-December, the best three-month increase, since January. The job market data suggest that the U.S remains one of the World’s healthiest economies, but the strong hiring has not been enough to bring the economy out of its 2 percent growth rate. Mark Witner, an economist at Wells Fargo & Co. said that the report immediately puts to rest a lot of worries that the U.S economy will come undone due to the intensifying global headwinds coming out of China and the Middle East.
With an addition of 2.65 million jobs in 2015, a monthly average of 221,000, last year was the second-best year for hiring, after 2014. However, strong hiring in construction is likely to come down during January and February due to the unseasonable warm weather.
Though jobs in transportation and warehousing increased in the holiday season, they could be temporary. Wages remained low, as the average pay dropped by a penny to $25.24/hour. In 2015, hourly pay increased by 2.5 percent, the second time since the recession in 2009. The pay-growth remains below the pace of a healthy economy; at 3.5 percent.
The Friday’s report could make it more likely for the Federal Reserve to raise rates, after it announced its first increase in a decade last month. Strong hiring could reduce the number of people seeking jobs, in turn leading to higher pay and help lift inflation closer to Fed’s 2 percent growth target.
Services firms, comprising from repair shops to hospitals, accounted for 90 percent of all jobs created in the U.S last year. Though job gains and stable unemployment could make the central bankers to increase additional interest rate, officials are unlikely to act before their March meeting.