Investing.com – The U.S labor market showed that the economy fewer jobs than expected in December while the jobless rate ticked up as expected from what had been its lowest level in more than nine years, according to official data released on Friday.
Non-farm payrolls rose only by 156,000 jobs in December, compared to the rise of 204,000 the prior month that was revised from the initial reading of 178,000. The data beat the consensus estimate for the creation of 178,000 jobs.
The jobless rate ticked up to 4.7% last month from the prior 4.6%, in line with forecasts. November’s surprise reading had been its lowest since August 2007.
Average hourly earnings rose month-on-month by 0.4%, compared to the prior decline of 0.1%. Analysts had expected a gain of only 0.3%.
Year-on-year, average hourly earnings increased 2.9%, compared to November's gain of 2.5%.
The increase in wages is being closely monitored by the Federal Reserve for evidence of diminishing slack in the labor market and upward pressure on inflation.
The participation rate settled at 62.7% in December, in line with the initial reading from the prior month that was revised down to 62.6%
Additionally, the private sector created less of the new job contracts than expected in December with a total of 144,000, compared to consensus expectations for 170,000.
November’s number was revised up to 198,000 private nonfarm payrolls, from the prior reading of 156,000.
Government payrolls increased by 12,000 last month, compared to the creation of 6,000 public jobs that occurred in November, revised from an initial gain of 22,000 positions.
Analysts had expected the government to create 7,000 new positions.
Furthermore, the average weekly hours remained unchanged at 34.3 in December, after the prior month’s data was revised slightly lower. Consenus had forecast them to remain unchanged at the initial reading of 34.4 for November.
Following the release, the U.S. Dollar Index traded at 101.91, compared to 101.69 earlier. EUR/USD traded at 1.0557, from 1.0585 before the release, USD/JPY traded at 116.37, from 116.07, and GBP/USD was at 1.2341, compared to the previous 1.2357.
Meanwhile, U.S. futures pointed to a flat open on Wall Street. The blue-chip Dow futures inched up 0.01%, S&P 500 futures edged forward 0.02% and the Nasdaq 100 futures advanced 0.07%.
Elsewhere, in the commodities market, gold futures traded at $1,175.55 a troy ounce, compared to $1,178.00 ahead of the data, while crude oil traded at $54.15 a barrel from $54.25 earlier.