Forex US Payrolls Than Expected

Payroll growth surged in December, capping the second-best year for American workers since 1999 and further evidence of a resilient job market that prompted the Federal Reserve to raise interest rates.

The 292,000 gain exceeded the highest forecast in a Bloomberg survey and followed a 252,000 increase in November that was stronger than previously estimated, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 200,000 advance. The jobless rate held at 5 percent, and wage growth rose less than forecast from a year earlier.

Such job-market durability indicates employers were sanguine about the economy’s prospects just before the recent rout in global financial markets. Fed policy makers are counting on tighter labor conditions to lead to broader increases in worker pay and inflation.

“Job growth is solid,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. “The labor market will remain supportive of consumer spending. We ought to see a broader pickup in wage growth this year.”

The December job gains, which were probably helped by mild winter weather across much of the country, were led by temporary-help services, health care, transportation and construction.

Labor Department revisions to prior reports added a total of 50,000 jobs to payrolls in the previous two months. For all of 2015, payrolls climbed by 2.65 million after 3.1 million in 2014 for the best back-to-back years for hiring since 1998-99.Economists’ Forecasts
December payroll estimates of 92 economists in the Bloomberg survey ranged from gains of 135,000 to 250,000. November was initially reported as a 211,000 increase. The unemployment rate, which is derived from a separate survey of households, matched the median forecast.

With the latest jobs report, the Bureau of Labor Statistics also issued revisions for data from the survey of households dating back to 2011. Payroll figures from the survey of employers will be revised when the January data is released Feb.
5. There were no revisions to the rates in any month last year, when unemployment averaged 5.3 percent.

While employers continue to aggressively add to headcounts, worker pay has yet to show a sustainable pickup. Average hourly earnings were unchanged from the prior month. They increased 2.5 percent over the 12 months ended in December. The median forecast called for a 2.7 percent year-over-year gain.

The advance, which was the biggest since October, was primarily due to an easy comparison with December 2014, when earnings fell 0.2 percent from the previous month. This so-called base effect will probably result in some payback with the January employment report when earnings come up against a strong January 2015 comparison.