De­cem­ber em­ploy­ment gain caps best year for US since 1999; wage gains lag

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

A rise in em­ploy­ment and a fall­ing job­less rate in De­cem­ber capped the best year for the la­bor mar­ket since 1999 and re­in­forced the U.S. role as the global econ­omy's stand­out per­former.

The 252,000 jobs added fol­lowed a 353,000 rise the prior month that was more than pre­vi­ously es­ti­mated, a La­bor Depart­ment re­port showed to­day in Wash­ing­ton. The job­less rate dropped to 5.6 per­cent, the low­est level since June 2008. The re­port wasn't all good news as earn­ings un­ex­pect­edly de­clined from a month ear­lier.

"We have con­tin­ued, solid job growth," said Michael Feroli, chief U.S. economist at JPMor­gan Chase & Co. in New York, who pro­jected a 240,000 gain. "It shows re­ally solid mo­men­tum in U.S. growth. There are not a lot of places in the world where we see that th­ese days."

About 3 mil­lion more Americans found work in 2014, the most in 15 years and a sign com­pa­nies are op­ti­mistic U.S. de­mand will per­sist even as over­seas mar­kets strug­gle. The drop in work­ers' hourly wages means Fed­eral Re­serve pol­icy mak­ers are less likely to move up the tim­ing of an in­ter­est-rate in­crease.

"The data cer­tainly don't point to any wage pres­sures," said Stephen Stan­ley, chief economist at Amherst Pier­pont Se­cu­ri­ties LLC in Stam­ford, Con­necti­cut. "There's noth­ing to worry about with re­spect to in­fla­tion. It low­ers the odds of the Fed hav­ing to move faster than they'd like."

Stocks fell, after a two-day rally in the Stan­dard & Poor's 500 In­dex, on the drop in wages and con­cern grew that Europe's stim­u­lus plan might not be suf­fi­cient. The S&P 500 de­clined 0.8 per­cent to 2,044.81 at the close in New York. The yield on the bench­mark 10-year note re­treated to 1.95 per­cent from 2.02 per­cent late yes­ter­day.

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 99 econ­o­mists called for a 240,000 ad­vance in pay­rolls. Es­ti­mates ranged from 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 the pre­vi­ous two months.

The un­em­ploy­ment rate, which is de­rived from a sep­a­rate La­bor Depart­ment survey of house­holds, was pro­jected to drop to 5.7 per­cent from 5.8 per­cent, ac­cord­ing to the survey me­dian. The job­less rate av­er­aged 6.2 per­cent last year, down from 7.4 per­cent in 2013 and the big­gest de­crease since 1984.

"The jobs re­port demon­strates that we have a very strong wind in our back in the U. S. econ­omy," La­bor Depart­ment Sec­re­tary Tom Perez said in a tele­phone in­ter­view. Part of the gov­ern­ment's un­fin­ished agenda is to "make sure the ris­ing tide lifts all boats."

More peo­ple dropped out of the la­bor force in De­cem­ber. The par­tic­i­pa­tion rate, which in­di­cates the share of work­ing-age peo­ple in the la­bor force, de­creased to 62.7 per­cent, match­ing the low­est level since Fe­bru­ary 1978, from 62.9 per­cent.

The com­bi­na­tion of job growth and cheaper gaso­line will prob­a­bly help stretch work­ers' pay­checks and sus­tain con­sumer spend­ing. Prices at the gas pump are the low­est since 2009, ac­cord­ing to AAA, the largest U.S. mo­tor­ing or­ga­ni­za­tion.

Av­er­age hourly earn­ings for all em­ploy­ees dropped from the prior month by 0.2 per­cent, the big­gest since com­pa­ra­ble records be­gan in 2006. Earn­ings rose 0.2 per­cent in Novem­ber, half as much as pre­vi­ously re­ported. They in­creased 1.7 per­cent over the 12 months ended in De­cem­ber, the least since Oc­to­ber 2012.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.