ECONOMICREPORT
Jobgrowthacceleratesto167,000inDecember
Averagehourlyearningsjump0.5%;joblessrateremainsat4.5%
PrintE-mailDisablelivequotesRSSDiggitDel.icio.usByRexNutting,MarketWatch
LastUpdate:4:10PMETJan5,2007
WASHINGTON(MarketWatch)--JobgrowthintheU.S.unexpectedlyacceleratedinDecember,withnonfarmpayrollsrisingby167,000andthejoblessrateremainingataverylow4.5%,theLaborDepartmentreportedFriday.
Jobgrowthwasmuchstrongerthanthe100,000expected,dashingfleetinghopesheldbysomethattheFederalReservewouldcutinterestratessoon.
"Theunderlyingrecoveryremainsintact,"wroteStevenWieting,aneconomistforCitigroupGlobalMarkets,inanotetoclients.
"Wecontinuetobelievethatmonetarypolicyisonholdfortheforeseeablefuture,"JoshuaShapiro,chiefeconomistforMFRInc.,wroteinanemailfollowingthe"solidreport."
Bondsandstockssoldoffonthenews.Theoddsofaratecutinthefirsthalfoftheyearfellto52%from86%beforethedata,accordingtotheChicagoBoardofTrade'sfederalfundsmarket.SeeMarketSnapshot.
Jobgrowthintheprevioustwomonthswasrevisedhigherbyatotalof29,000.
EconomistshadexpectedjobgrowthtoslowfromNovember'supwardlyrevised154,000,especiallyafterWednesday'sADPemploymentreport,whichshoweda40,000declineinprivate-sectorpayrolls.SeeEconomicCalendar.
JoelPrakken,presidentofMacroeconomicAdvisers,whichcomputestheADPindex,wasunapologeticaboutthebigdiscrepancybetweentheADPandgovernmentnumbers,sayinghewouldn'tbesurprisedifthegovernment'sdatawererevisedlower.
"Wearen'ttryingtoforecasttheinitialestimate,"Prakkensaid,"wearetryingtogetitright."
ThegovernmentsaidFridaythatpayrollsgrewby1.84millionin2006,anaverageof153,000permonth.Revisionstobepublishednextmonthwilllikelyincreasethattotalsignificantly.
Growthaveraged136,000amonthinthefinalquarteroftheyear.Fedresearchershavesaidtheeconomyneedstoaddabout100,000jobspermonthtoabsorbnewentrantsintotheworkforceandmaintainasteadyunemploymentrate.
Withstrongjobgrowthin2006,thejoblessratefellfrom4.9%atthebeginningoftheyearto4.5%.Readthefullrelease.
Averagehourlyearningsjumpedby8cents,or0.5%,faraheadofthe0.3%riseexpected.Overthepast12months,averagehourlyearningshaveincreased4.2%,morethandoubletheinflationrateandthefastestgrowthsincelate2000.
Withproductivityslowing,theaccelerationinearningswillkeepFedofficialsfocusedoninflationarypressuresinthetightlabormarket.Ontheotherhand,fasterwagegrowthshouldalsosupportconsumerspending,keepinggrowthontrack.
December'sjobgrowthcameinstrongdespitelossesinthreekeysectors:Construction,manufacturingandretail.
Constructionjobsfellby3,000afterseasonaladjustment.Residentialconstructionjobsfellby16,000,butthoselosseswerepartiallyoffsetbygainsinnonresidentialconstruction.
Manufacturingjobsdroppedby12,000inDecember,thesixthconsecutivedecline.Inthepastyear,factoryjobshavefallenby72,000.ThelossesinDecemberwereconcentratedinautos,primarymetalsandtextiles.Of84manufacturingindustries,44.6%wereaddingjobsinDecember.
"Thisisterriblenews,"saidPeterSchiff,presidentofEuroPacificCapital."TheproblemsoftheU.S.economyarejustgettingworse.Wedestroyed12,000goods-producingjobs."
Retailfirmscut9,000jobsafterseasonaladjustment.Retailjobsfellby58,000in2006.
Jobswereaddedinmosteveryothersector.Of278industries,58.6%wereaddingjobsinDecember.
Jobgrowthwasstronginprofessionalservices,whichadded50,000workersinDecemberand420,000inallof2006.
Healthcareadded31,000jobsinDecemberand324,000intheyear.
Employmentinfoodservicesincreasedby23,000inDecemberand304,000fortheyear.
Intheseparatesurveyofhouseholds,thegovernmentreportedemploymentgainsof303,000inDecemberandanincreaseinunemploymentof23,000to6.85million.In2006,thehouseholdsurveyindicatedjobgrowthof3.14million.
Thelabor-forceparticipationrate(thepercentageofadultsworkingorlookingforwork)roseto66.4%from66.3%.Theemployment-populationratio(thepercentageofadultsworking)roseto63.4%from63.2%.That'sthehighestemploymentratesinceSeptember2001.
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RexNuttingisWashingtonbureauchiefofMarketWatch.
