WASHINGTON (Reuters) – US employment rose less than forecast in December, but a rebound in wages signaled a sustained boost in the labor market that opens the door to stronger economic growth and new rate hikes Of interest by the Federal Reserve this year.
Non-farm payrolls rose by 156,000 jobs last month, the Labor Department said on Friday, down from 178,000 analysts polled in a Reuters poll. However, progress is still on the level considered sufficient to absorb people entering the labor market.
“Job creation and overall labor market conditions remain strong, with the potential for stronger fiscal stimulus in the form of infrastructure spending and tax cuts, job creation looks set to remain solid by 2017,” said Jim Baird , Chief investment officer at Plante Moran Financial Advisors.
In addition, data for October and November were revised upwards to show 19,000 more jobs than had been reported. By 2016, the US economy created 2.16 million jobs, a solid starting point for the new government.
Average hourly earnings in December rose 2.9 percent year-on-year, its biggest increase over the past six and a half years, which could boost inflation and tighten monetary policy.
Meanwhile, the unemployment rate rebounded a tenth in December to 4.7 percent, as expected, from 4.6 percent in November, its lowest level in the past nine years.
The Department of Labor’s employment data adds to a slew of data, from housing to manufacturing activity and car sales, that suggest President-elect Donald Trump is inheriting a healthy economy from Barack Obama’s government.
Trump, who will take office on Jan. 20, pledged to raise spending on infrastructure, reduce taxes and deregulate the economy, measures analysts say will drive growth this year.
The Federal Reserve has already pointed to two or three possible rises in US interest rates this year after increasing its benchmark rate last December by a quarter of a point to a band between 0 , 5 and 0.75 percent.