A rise in employment and a falling jobless rate in December capped the best year for the labor market since 1999 and reinforced the U.S. role as the global economy’s standout performer.
The addition of 252,000 jobs followed a 353,000 rise the prior month that was more than previously estimated, a Labor Department report showed on Friday. The jobless rate dropped to the lowest level since June 2008. The report wasn’t all good news as earnings unexpectedly declined from a month earlier.
An additional 2.95 million Americans found work in 2014, the most in 15 years and a sign companies are optimistic U.S. demand will persist even as overseas markets struggle. The combination of job growth and cheaper gasoline will probably help stretch workers’ paychecks and sustain consumer spending.
Stronger employment growth underscored the U.S. economy’s resilience in the face of cooling markets that stretch from Europe to China.
“We have continued, solid job growth,” said Michael Feroli, chief U.S. economist at JPMorgan Chase in New York, who projected a 240,000 gain. “It shows really solid momentum in U.S. growth. There are not a lot of places in the world where we see that these days. The oddity in the report is the move down in average hourly earnings.”
Job growth last month was highlighted by the biggest gain in construction employment in almost a year. Factories, health care providers and business services also kept adding workers in December.
The median forecast in a Bloomberg survey of economists called for a 240,000 advance in payrolls. Estimates of 99 economists ranged from gains of 160,000 to 305,000 after a previously reported 321,000 November increase. Revisions to prior reports added a total of 50,000 jobs to overall payrolls in the previous two months.
The unemployment rate, which is derived from a separate Labor Department survey of households, was projected to drop to 5.7 percent from 5.8 percent, according to the survey median.
The participation rate, which indicates the share of working-age people in the labor force, decreased to 62.7 percent from 62.9 percent. Average hourly earnings for all employees dropped by 0.2 percent, the biggest since comparable records began in 2006, to $24.57 from the prior month. Earnings rose 0.2 percent in November. They increased 1.7 percent over the 12 months ended in December, the smallest gain since October 2012.
In accordance with usual practice, the December jobs report also incorporated annual revisions in seasonally adjusted household survey data.
Figures for January through November showed very little change from previous estimates. Construction companies added 48,000 workers last month, the most since January. Factories increased payrolls by 17,000 in December.