The U.S. economy added 148,000 net new jobs in December. Economists surveyed by Bloomberg had expected growth of 190,000 jobs. The Bureau of Labor Statistics also revised the November job growth to 252,000 from an initial 228,000. The official unemployment rate remained at 4.1%, the lowest rate since December 2000. The economy has now added an average of 204,000 jobs over the last three months of 2017 and 2017 is the sixth straight year where the economy has added more than 2 million jobs.
And for another month, the much-anticipated (by the Federal Reserve, at least) surge in wage growth failed to materialize. Average hourly wages rose by 0.3% from November and are now up 2.5% year over year. Those results exactly matched economists’ expectations. Labor force participation remained at 62.7%, continuing lows that have puzzled economists. The full unemployment rate came in at 8%, just slightly above the 7.9% post-global financial crisis low set in October. (The full unemployment rate counts discouraged workers who have stopped looking for a job and part-time workers who would like a full time position as unemployed.) The biggest drag on job growth came from the retail sector which lost 21,000 jobs from November.
Both the Standard & Poor’s 500 stock index and the Dow Jones Industrial Average are up this morning, by 0.37% and 0.40%, respectively, as traders and investors saw the slight disappointment as likely to keep the Federal Reserve from increasing the pace at which it will raise interest rates in 2018.