US economists expected moderate job growth in December of 2015, but instead the US economy roared ahead, adding 292,000 jobs for the month. The unemployment rate held steady at 5 percent.
Over the course of 2015, the US economy added 221,000, on average, per month. While this is a drop from 2014, when jobs grew at an average rate of 260,000 non-farm jobs per month, it still marks one of the better years for job additions in the last 16 years.
The October jobs report was also revised upwards, making it an even better month for job gains than it once appeared, as 307,000 jobs were added. This made October the strongest month for job growth in 2015. November job gains also went up according to recent revisions. That means 50,000 more jobs were added than was initially thought. And that makes Q4 (October, November and December) the best 3-month run for job gains in 2015.
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Unemployment Rate Stays at 5%
As mentioned above, the unemployment rate remained flat, coming in at 5 percent. Many economists think it will stay around that level for the foreseeable future. The U.S. unemployment rate has not fallen below 5 percent since 2007.
Wages Stay Low
Unfortunately for some workers, wages did not see much improvement. Average hourly earnings increased by 2.5 percent,but the Fed says 3.5 percent is the optimum target level. Fed officials and economists had hoped that a tighter labor market would raise wages closer to that level.
Labor-Force Participation Stays Low
The Labor-force participation (which measures the percentage of the labor force that is actually employed or looking for employment) ticked up slightly, but it still stands at its lowest level (62.6%) since since 1977. There are also a lot of workers who have taken part-time positions because they couldn’t find full-time jobs.
Summing It Up
Job increases and the unemployment rate signal that the economy is moving in the right direction. But rising wages, greater labor force participation, and more full-time employees in 2016, would indicate the economy is transitioning from a “tentative” recovery to a more robust and long-lasting one.
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