Economy adds 292K jobs in December

The U.S. economy added 292,000 jobs in December, well ahead of expectations, capping off the second best year of gains since 1999.

The unemployment rate held steady at 5 percent, the lowest since early 2008, the Labor Department reported on Friday.

{mosads}Job growth for the year totaled 2.65 million after October and November were revised up by 50,000 jobs. That was slower than 2014’s expansion of more than 3.1 million new jobs.

The 5.75 million jobs created in the past two years represent the best streak for the labor market since the late 1990s.

Strong growth at the end of the year boosted the three-month average of jobs growth to 284,000, the fastest rate in a year.

The strength of the labor market is likely to figure prominently into President Obama’s final State of the Union address on Tuesday.

In a video preview released by the White House on Wednesday, Obama said he has been thinking about how the nation has worked “to recover from crisis” and people’s” ability to change for the better.”

“Not just the remarkable progress we’ve made, not just what I want to get done in the year ahead, but what we all need to do together in the years to come,” he said. “The big things that will guarantee an even stronger, better, more prosperous America for our kids — that’s what’s on my mind.”

The economy has added jobs for 63 straight months and appears on track to maintain that momentum in 2016, with some economists expecting that full employment will be reached by mid-year.

Jason Furman, chairman of the Council of Economic Advisers, said the annual average unemployment rate has seen its fastest two-year decline in 30 years.

Furman noted that the private sector has added 14.1 million jobs over 70 straight months, extending the longest streak on record.

He said the president will push for approval of the Trans-Pacific Partnership, increased investment in infrastructure and raising the minimum wage in his last year in office. 

Job gains averaged about 221,000 a month last year, down from 260,000 a month in 2014. October was the strongest month of 2015, eclipsing 300,000 jobs.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said that “while this report is better than expected, millions of more Americans would be working today if the Obama administration had spent less time growing Washington and more time growing our local economy.”

“If President Obama wants to make a real difference during his last year in office, he’ll use his final State of the Union address to propose new ways to break down barriers to job creation and encourage economic growth,” he said. 

During the past year, the unemployment rate fell 0.6 percentage points and the number of unemployed fell 800,000.

U.S. employers have continued to hire despite a slowdown in global growth and a rocky start to the year in stock markets amid rising volatility in China.

“Today’s job numbers should be soothing to the [Federal Open Market Committee], to markets, and to workers, and stand in sharp contrast to the negative economic news emanating from China,” said Beth Ann Bovino, chief economist at Standard & Poor’s.

“Markets are desperate for good news, and now have it, but it comes with a caveat because better employment growth means the Fed will raise rates faster,” she said.

The Federal Reserve raised a key interest rate last month for the first time in nearly a decade.

In December, healthcare employment rose by 39,000, averaging 40,000 per month last year, up from 26,000 in 2014.

Construction showed strong job growth for the third consecutive month, gaining 45,000 jobs in December.

Manufacturing added 8,000 jobs in a year when the sector struggled with the rising value of the dollar, making U.S. exports more expensive abroad.

A separate report earlier this week showed that the sector contracted for the second straight month.

A soft spot in jobs continued for mining with oil prices falling through the year. Employment in the sector declined 8,000. After adding 41,000 jobs in 2014, mining lost 129,000 jobs last year, with most of the loss in support activities for mining.

The labor market participation rate ticked up to 62.6 percent last month, the highest level since late summer, up from 62.5 percent.

While the jobs market chugged along at a good clip, average hourly pay fell a penny in December, to $25.24 an hour.

Still, wages rose 2.5 percent in the past year — below the 3.5 percent that is expected in a healthy economy, but one of the best figures since the recession ended in 2009.

“Wages have risen faster over the past year than at any time since the recovery began,” Furman said. 

—Last updated at 10:15 a.m.