Jobs report misses expectations, unemployment rate holds at 17-year low

US jobs growth loses steam in December

USA employment growth last month was slower than market expectations but remained solid.

Black unemployment dropped to 6.8 percent in December 2017, a rate not seen since the 1970s, according to Friday statistics from the Department of Labor.

It said the jobless rate was 4.1 percent - unchanged from the figure for the previous month. Although December's nine-cent gain is better news than a mid-December report from the BLS that found real average hourly earnings fell by 0.2 percent from October to November, this still puts annualized wage growth at just 2.5 percent. The just-enacted USA tax cuts, too, are raising hopes for faster growth and higher corporate profits and fueling a powerful stock market rally.

The biggest gains were in healthcare, with 31,000 jobs; construction trades, with 30,000 jobs, and manufacturing, with 25,000 jobs.


December's solid employment gains capped off a year marked by rising consumer confidence, discretionary spending and better-than-expected holiday sales - even as robust wage growth remained elusive.

National Association of Realtors chief economist Lawrence Yun was underwhelmed by the report, saying that much more explosive growth is needed to make a change. As the labor market tightens, the Federal Reserve is debating the timing of its next rate hikes. For all of 2017, the economy created 2.1 million jobs, below the 2.2 million added in 2016. That would mark the 87th straight month that employers hired more people than they fired, extending the longest-ever stretch of job growth on record. While the manufacturing, building and health care sectors did fairly well in December in terms of job creation, retail employment fell by 20,000.

Stagnant wage gains and muted consumer price increases could hinder US central bankers from boosting short-term interest rates as quickly as they would like. "Jobs drive housing demand and with the unemployment rate remaining at its lowest level of the millennium, it's only going to pick up". Instead they got the worst employment print since July, according to data released on Friday morning by the U.S. Bureau of Labor Statistics (BLS). Workers should benefit from a strong economy in 2018, as unemployment will continue to fall and wages will finally accelerate. General merchandise stores payrolls tumbled by 27,300 in December, with employment at clothing stores dropping by 3,800 jobs. Bars and restaurants added 25,000 jobs.

Although some economists are hopeful about the steady growth, others aren't sure that it's enough to reach the 50-year average of 1.5 million residential construction starts. As paid training spreads and more workers master skills that boost their productivity, paychecks should grow too, as companies compete for workers, said Josh Wright, chief economist at iCIMS, a hiring software company.

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