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BREAKING NEWS

US job growth slows in December, wages rebound

US employment increased less than expected in December but there was a rebound in wages, pointing to sustained labour market and economic growth.

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US job growth slows in December, wages rebound

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The number of people in work in the United States rose by less than expected in December, however November’s numbers were revised upwards and there was a rebound in wages, pointing to sustained growth in the labour market.

Public and private employers added 156,000 jobs last month, with 204,000 in November.

The unemployment rate ticked up to 4.7 percent of the workforce from a nine-year low of 4.6 percent the previous month.

That was because more people were looking for work a sign of confidence in the jobs market.

Wages rose 2.9 percent from December 2015, the largest increase since June 2009, from 2.5 percent in November.

That sets up further interest rate rises from the US central bank, the Federal Reserve, this year with stronger economic growth.

The Fed raised its benchmark interest rate last month by 0.25 percent and has forecast three rate hikes this year.

Strong economy

The employment report added to data ranging from housing to manufacturing and auto sales in suggesting that President-elect Donald Trump is inheriting a strong economy from the Obama administration.

Trump, who takes over from President Barack Obama on January 20th, has pledged to increase spending on aging US infrastructure, cut taxes and relax regulations. These measures are expected to boost growth this year.

But the proposed expansionary fiscal policy stance could increase the budget deficit.

The minutes of the Federal Reserve’s December meeting released on Wednesday showed that almost every Fed policymaker agreed Trump’s measures could call for a faster move on rates.

Broad gains

Employment growth in 2016 averaged 180,000 jobs per month, down from an average gain of 229,000 per month in 2015. The slowdown in job growth is consistent with a labour market that is near full employment.

There has been an increase in employers saying they cannot fill vacant positions because they cannot find qualified workers. The skills shortage has been prominent in the construction industry.

“The pool is all but drained especially for skilled workers. We can’t bring factory jobs back because there’s no one out there to run them,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.

December’s job gains were broad, with manufacturing payrolls rising 17,000 after declining for four straight months. Construction payrolls fell 3,000 in December after three consecutive months of increases.

Retail sector employment rose 6,300 after increasing 19,500 in November.