News

US jobs growth strong despite global volatility

Non-farm payrolls increased by a seasonally adjusted 292,000 in December.

Non-farm payrolls increased by a seasonally adjusted 292,000 in December. Economists surveyed by Reuters had expected a strong finish for the year, with about 200,000 jobs added in December (1). The Labor Department confirmed that the unemployment rate remained at 5%, the lowest level since the financial crisis (2). Worker pay however disappointed, rising less than forecast on an annual basis (3).

Revisions to October and November data found that showed employers added 50,000 more jobs than previously estimated. Across the final quarter of 2015, job gains in the United States have averaged 284,000 per month, the strongest quarterly pace of the year (2).

“It is one more sign the domestic economy continues to chug along,” noted Kate Warne, an investment strategist at Edward Jones.

“It is not a game changer in terms of faster economic growth, but it offsets some of the other indicators that recently have suggested the economy might be slowing down.” (4).

Professional and business services, construction, health care, and food services saw job increases. Mining however continued to decline, dropping by 8,000, and taking the total jobs lost in the sector in 2015 to 129,000 following weakness in commodity markets.

The strong data follows the first US interest rate rise in nearly a decade in December as the Fed raised interest rates from 0.25 to 0.5%. The data confirms the resilience of the US economy when there is considerable volatility in the Chinese markets and broader global economic uncertainty. The US dollar rallied strongly in response.

(1) The Guardian – “US jobs report: economy adds 292,000 positions in strong finish to 2015”

(2) The FT – “US jobs growth defies global pressures”

(3) Bloomberg – “Payrolls Surge, U.S. Jobless Rate at 5% as Workforce Grows”

(4) The BBC – “US economy adds 292,000 jobs in December”