U.S. Adds 155,000 Jobs in December, Unemployment Rate Holds at 7.8 Percent

Andrew Klips |

The Labor Department said Friday that 155,000 new U.S. jobs were created in December, signaling that employers didn’t slow hiring during the Washington debates over the fiscal cliff.  The report also showed that the nation’s unemployment rate remained at 7.8 percent after November’s reading was upwardly revised from the previous estimate of 7.7 percent.  The job creation pace was consistent with the two-year average in the States, which stands at 153,000 per month.  In both 2011 and 2012, employers added 1.84 million jobs.  To support population growth and a healthy economy, economists believe that about 300,000 jobs need to be created each month.

Economists were expecting between 150,000 and 160,000 jobs to be created in December.

The healthcare sector provided the most robust gains for the month with the addition of 45,000 new jobs.  Hiring in the construction industry was strong with 30,000 new hires, the largest one-month number of new jobs in the past 15 months.  The spike was likely in part because of many new jobs to rebuild areas crumpled by Hurricane Sandy that pasted the East Coast late in October.

Manufacturers also helped in December with 25,000 new jobs, its best month in the last nine.

The government was responsible for the largest decline in jobs, shedding 13,000 in December.

The number of unemployed Americans rose by 164,000 to 12.2 million during December, signaling that the jobs market continues to remain soft, although the 7.8% unemployment rate hovers around its lowest level since 2008.

On Thursday, payroll processor ADP said that its monthly survey showed U.S. businesses adding 215,000 jobs in December, far outpacing the 148,000 in November.  The ADP report has been revamped recently as it is trying to predict the monthly figure after the final three revisions that are made by the government.  If ADP’s new algorithms are on target, that means that over the next few months, December jobs figures will be upwardly revised, although it is notable that some economists have viewed ADP’s report with skepticism.

The Labor Department reported on Thursday that initial jobless claims increased by 10,000 to a seasonally adjusted 372,000 for the week ended December 29, exceeding economist predictions of total claims of 360,000 for the week.  The four-week moving average, viewed as a better gauge of labor trends because it eliminates volatility, was flat at 360,000 new jobless applications.

Wall Street is mixed with the jobs report on Friday.  The Dow Jones Industrial Average has edged ahead by 10 points (0.08%), the S&P 500 has inched upward by 3 points (0.19%), but the tech-heavy Nasdaq exchange is off slightly by 3 points (-0.10%).

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