December posts strong growth, adds 292,000 jobs
What does this mean for future rate hikes?
December job creation grew by 292,000, cementing the growing strength of the labor market, the Bureau of Labor Statistics said.
“Today’s labor market report was strong across the board. This will likely firm the market’s expectation that the Fed will proceed with their gradual increase in the Fed Funds target – most likely with the next step in March,” said Doug Duncan, chief economist with Fannie Mae.
However, not all economists agree.
“While it is a strong report overall, it is not so positive as to overshadow the troubling developments in China recently, and the Fed will likely need more ammunition before it goes authorizes another rate hike,” said National Association of Federal Credit Unions Chief Economist Curt Long.
Once again, the number of unemployed persons was 7.9 million, essentially unchanged.
Also not moving, the unemployment rate stayed at 5.0% for the third month in a row.
Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 800,000, respectively.
The civilian labor force participation rate, at 62.6%, was little changed in December and has shown little movement in recent months.
In December, average hourly earnings for all employees on private nonfarm payrolls, at $25.24, changed little, following an increase of 5 cents in November.
Duncan also added that in regards to housing, the report said 45,000 construction jobs were added to the market.
“This makes the third consecutive very strong month of construction employment additions. The warmer than usual fall weather undoubtedly helped and this probably allowed the settings of foundations in the colder climes, which should allow work to advance over the winter,” he said.
“If this plays out, it will be good news on the housing supply side as the slow ramp-up of supply in the presence of increased employment and housing demand has led to strong price appreciation and rising affordability constraints. Paired with modest interest rate increases, there have been concerns of a slower pace of sales growth in 2016 compared to 2015,” Duncan said.