United States: Payroll growth closes out 2015 on high note
January 8, 2016
Non-farm payrolls grew by 292,000 in December, which was higher than November’s upward revised increase of 252,000 (previously reported: +211,000), and far exceeded market expectations of a 200,000 increase. Cumulative payroll growth during the period between October and December was the strongest since Q4. The strong result comes as positive news amid ongoing economic challenges both domestically and abroad.
The private sector was responsible for the bulk of new hiring, having added 275,000 jobs in December. The largest gains were registered in the professional business services and healthcare sectors. The public sector added 17,000 jobs in December.
The unemployment rate—derived from a different survey—held at 5.0% for the third consecutive month. The print was in line with market expectations and continued to mark the best reading since April 2008. The unemployment rate is below the Fed’s target zone of 5.2%–5-5%, although the labor participation rate is still significantly low. Labor participation came in at 62.6% again in November, marking the lowest level in several decades. Moreover, the underemployment rate, a more complete measure which takes into account discouraged workers and part-time workers who want full-time jobs, held in December at November’s 9.9%. Meanwhile, average hourly earnings were unchanged over the previous month, which was below November’s 0.2% gain. Annual wage gains increased from 2.3% in November to 2.5% in December.
Author: Carl Kelly, Economist