According to the Bureau of Labour Statistics’ Employment Situation report, American employers added 155,000 jobs last month. This rate was just enough to keep pace with underlying growth and means the country’s unemployment rate remains at 7.8%.
US employment is closely watched by investors as it is strong indicator of the health of the world’s largest economy. In addition, the Federal Reserve intends to keep interest rates at near to zero until unemployment falls below 6.5%.
December’s 155,000 rise was down from the 161,000 new jobs that were reported in November. Meanwhile, the unemployment rate for November was revised up from 7.7% to 7.8%.
Employment gains were seen in healthcare, food services and drinking places, construction and manufacturing. Some commentators had feared that worry about the US going over the fiscal cliff could cause firms to hold back on hiring decisions.
Paul Ashworth, chief US economist at Capital Economics, commented: “Admittedly, the 155,000 gain is perhaps better than it looks given that firms were probably nervous about adding workers with the fiscal cliff looming.
“But December’s gain also included an additional 30,000 construction jobs that were probably a result of the temporary boost from post-Sandy rebuilding.
"Retail employment actually fell by 11,000 in December, suggesting that the holiday shopping season ended with a whimper.”
More positive news on Friday came from the Institute of Supply Management (ISM), which reported that December saw the largest rise in services activity since February 2012.
The ISM non-manufacturing index, which is a snapshot of the US services sector, increased to 56.1 points last month – up from 54.7 in November and ahead of economists’ expectations.