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US job growth still lacklustre

US job growth still lacklustre
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There was no sign of the pick-up in job creation that the US economy needs to recover, in December as the pace of hiring by employers there eased slightly.

Payrolls outside the farming sector grew by just 155,00 last month, just below November’s increase.

Job gains were distributed broadly throughout the economy, and were strongest in manufacturing and construction.

The jobless rate, which started to ease down in August, held steady at 7.8 percent of the workforce in December, the same as November as that month’s figure was revised up by the US Labor Department.

It is down nearly one percent from a year earlier, but remains well above the average rate over the last 60 years of about six percent.

“This shows the economy is chugging along, with payroll gains at about the average it has been over the past year,” Tom Porcelli, an economist at RBC Capital Markets in New York.

The good news is that layoffs are declining, and the number of people signing on for unemployment benefit last month was near a four-year low.

But most economists expect the US economy will be held back this year by tax increases and weak spending by households and businesses.

A wave of government spending cuts is due to begin around March, however many economic forecasts assume the cuts – which would hit the military, education and other areas – will ultimately be pushed into next year as part of a deal sought by lawmakers to gradually reduce the government’s debt burden.