(MENAFN- The Peninsula) US job growth increased briskly in December, positioning the economy for a sturdy pace of expansion this year and keeping the Federal Reserve on course to start raising interest rates.
Nonfarm payrolls increased 252,000 last month after an upwardly revised 353,000 jump in November, the Labor Department said yesterday.
The unemployment rate fell 0.2 percentage point to a 6-1/2-year low of 5.6 percent, in part as people left the labour force.
But a five cent drop in average hourly earnings after rising six cents in November, took some shine off the report.
"This is probably a good enough number to allow the Fed to stay on course in terms of adjusting policy, but it probably won't cause them to change their timing from mid-year," said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York.
US stock index futures erased losses after the report, while the dollar rose. Prices for US Treasury debt were trading higher.
December marked the 11th straight month of payroll increases above 200,000, the longest stretch since 1994. With October's count also revised higher, the economy created 50,000 more jobs than previously reported in the prior two months.
But weak wage growth could see the Fed cautious about raising interest rates too soon. The US central bank has kept its short-term interest rate near zero since December 2008.
It has not raised interest rates since 2006, but recently signalled it was moving closer to hiking, even if inflation remains below the Fed's 2.0 percent target. Most economists expect the first rate increase in June.
An acceleration in wage gains is in the cards as the labour market continues to tighten. That, together with lower petrol prices are expected to provide a tail wind to consumer spending this year.
"The wage story should look much better at the end of 2015 than it does here," said Dan Greenhaus, chief strategist at BTIG in New York.
Economists polled by Reuters had expected employment to increase 240,000 in December and the unemployment rate to fall one-tenth of a percentage point to 5.7 percent.
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