U.S. employers hire at robust pace, defying global trends

WASHINGTON – The U.S. economy is motoring ahead despite slowing global growth that caused upheavals in financial markets around the world this week.

Employers added a robust 292,000 jobs last month, and the unemployment rate stayed low at 5 percent, the Labor Department said Friday. Job gains in the October-December quarter averaged 284,000, the best three-month increase since last January.

The strong hiring underscores the resilience of the United States at a time of slow global growth and financial turmoil. Healthy consumer spending, modest gains in home construction and an uptick in government spending should offset drags from overseas and bolster growth this year, economists said.

The report “immediately puts to rest a lot of the worries that the U.S. economy will come undone due to the intensifying global headwinds coming out of China and the Middle East,” said Mark Vitner, an economist at Wells Fargo.

For all of 2015, employers added 2.65 million jobs, a monthly average of 221,000. That made 2015 the second-best year for hiring since 1999, after 2014.

The unemployment rate has held at 5 percent for the past three months, despite the solid job gains, because nearly 1 million more Americans have begun seeking work since September.

Wages were the one weak spot in December, as average pay slipped a penny to $25.24 an hour. Hourly pay has risen 2.5 percent in the past year, only the second time since the recession ended in mid-2009 that it’s reached that level. Yet pay growth remains below the roughly 3.5 percent pace typical of a healthy economy.

The U.S. “is uniquely positioned among the major industrial economies to withstand a global slowdown,” Vitner said.

Global trade accounts for about 30 percent of U.S. economic activity, one of the lowest such percentages in the world, according to Patrick O’Keefe, director of economic research at the consulting firm CohnReznick.

Friday’s solid jobs report could make it more likely that the Federal Reserve will further raise rates after announcing its first increase in nearly a decade last month. Steady hiring would reduce the supply of people seeking jobs, which could lead to higher pay and possibly help lift inflation closer to the Fed’s 2 percent target.

Many economists expect the Fed to raise its benchmark rate three times this year. Stuart Hoffman, chief economist at PNC Financial Services, said the robust jobs data mean the next increase will probably be in March.

Despite the jobs report, a wave of late selling pummeled U.S. stocks Friday and pushed the market to its worst week in four years.

The dismal start to the new year comes as investors worry that China’s huge economy is slowing down. That has helped send the price of oil plunging to its lowest level since 2004, the latest blow to U.S. energy companies.

The Dow Jones industrial average dropped 167.65 points, or 1 percent, to 16,346.45. The Standard & Poor’s 500 index fell 21.06 points, or 1.1 percent, to 1,922.03. The Nasdaq composite index shed 45.80 points, or 1 percent, to 4,643.63.

The Dow and S&P 500 are each down about 6 percent for the week. The Nasdaq composite fell even more, 7.3 percent. That index is heavily weighted with technology and biotech companies, both of which were high-fliers last year.