U.S. closes out 2017 with more hiring

Adds 148,000 new positions in December

WASHINGTON • U.S. employers added 148,000 jobs in December, a modest gain but still enough to suggest that the economy entered the new year with solid momentum.

The unemployment rate remained 4.1 per cent for a third-straight month, the lowest level since 2000. For all of 2017, employers added nearly 2.1 million jobs, enough to lower the unemployment rate from 4.7 per cent a year ago.

Taken as a whole, Friday’s government report points to the job market’s strength and resilience 81/2 years into an economic expansion. Job growth remains steady and is underpinning an economy that’s both contributing to and benefiting from an improved global outlook. The just-enacted U.S. tax cuts, too, are raising hopes for faster growth and higher corporate profits and fuelling a powerful stock market rally.

At the same time, the pace of job growth is slowing, which typically happens when unemployment falls to ultra-low levels and fewer people are available to be hired. Average monthly job gains have declined to 171,000 this year from a peak of 250,000 in 2014. Last year’s job gains were the fewest since 2010.

Despite the low unemployment and the difficulty some employers face in finding qualified workers, pay gains remain sluggish. Average hourly earnings rose 2.5 per cent in December from a year earlier — about a full percentage point lower than is typical in a healthy economy.

The steady but unspectacular pace of hiring and modest wage gains make it unlikely that the Federal Reserve will feel compelled to accelerate its pace of rate increases. Blockbuster job growth and rapid pay increases would have stoked fears that inflation could accelerate and potentially have nudged the Fed toward quicker rate hikes — something many investors fear.

Investors seemed pleased and sent stock prices up, one day after the Dow Jones industrial average broke through the 25,000 mark for the first time. “You’ve got the ‘Goldilocks’ place for markets: Strong growth and low inflation,” said Carl Tannenbaum, chief economist at Northern Trust.

The jobless rate for African-Americans reached a record low of 6.8 per cent in December. And the jobless rate for veterans of Afghanistan and Iraq fell to 3.3 per cent, also a record low.

The African-American rate is still much higher than the rate for whites, which was 3.7 per cent, or AsianAmericans, at 2.5 per cent. Blacks have long had a higher unemployment rate than whites. But the gap is now at its lowest level since 1972, when the government began tracking the data, according to JPMorgan Chase.