Job market shrugs off fears
Construction, manufacturing hiring drives growth in U.S. employment
WASHINGTON – The U.S. job market proved resilient in December despite fears that a budget impasse in Washington would send the economy over the fiscal cliff and trigger growth-killing tax hikes and spending cuts.
Employers added 155,000 jobs last month, roughly matching the solid but unspectacular monthly pace of the past two years.
The gains announced Friday weren’t enough to reduce unemployment, which remained a still-high 7.8 percent. The November rate was revised up a notch from the 7.7 percent the government had originally reported.
Construction gains
Robust hiring in construction and manufacturing drove last month’s job increases. Construction firms added 30,000 jobs, the most in 15 months. In part, that increase likely reflected hiring needed to rebuild from Superstorm Sandy. And the housing market’s gradual recovery has energized homebuilding. Manufacturers added 25,000 jobs, the most in nine months.
More hours
Economists found other hopeful news in the report. Americans were given more work hours in December – an average 34.5 hours a week in December, up from 34.4 in November. And their pay outgrew inflation. Hourly wages rose 7 cents to $23.73 last month, a 2.1 percent increase compared with a year earlier. Over the same period, inflation rose 1.8 percent.
Weak spots
Despite last month’s hiring gains, Friday’s report pointed to some weakness in the job market. For example, the number of unemployed actually rose 164,000 to 12.2 million. About 192,000 people entered the work force last month, but most did not find jobs.
The unemployment numbers come from a government survey of households. The number of jobs added comes from a separate survey of businesses.
A broader category that includes not only the unemployed but also part-time workers who want full-time jobs and people who have given up looking for work was unchanged in December at 22.7 million.
Economists said the pace of hiring almost certainly isn’t strong enough to lead the Federal Reserve to cut short its bond-buying program. The Fed is spending $85 billion a month on bond purchases to try to drive down long-term borrowing costs and stimulate economic growth.
The job market is being held back by government cutbacks. Governments at all levels cut 13,000 jobs in December. Since the Great Recession ended in mid-2009, governments have eliminated 645,000 jobs – an average of nearly 15,400 a month.