Cold bites into US hiring but the trend stays warm
US employers hired the fewest workers in almost three years last month, but the setback was likely to be temporary amid signs that cold weather might have had an impact.
Non-farm payrolls rose only 74,000 in December, the smallest increase since January 2011, and the unemployment rate fell 0.3 of a percentage point to 6.7 per cent, the Department of Labour said yesterday. The unemployment rate was the lowest since October 2008 and in part reflected people leaving the labour force.
The step back in hiring is at odds with other employment indicators that have painted an upbeat picture of the jobs market. The data showed that 38,000 more jobs were added in November than previously reported.
Construction employment fell for the first time since May and leisure and hospitality payrolls rose marginally, suggesting that cold weather in some parts of the country had held back hiring. There were also declines in government employment.
The smaller survey of households showed an increase in the number of people who stayed at home because of the bad weather.
Economists had expected job gains of 196,000 jobs last month. But many pushed up their forecasts in the wake of upbeat labour market data during the week.
A string of data - from consumer spending and trade to industrial production - suggested the US economy ended 2013 on strong footing and is positioned to gain even more strength this year.
The change in the economy's fortunes, which gave the Federal Reserve confidence last month to start dialling back its massive monetary stimulus, reflects waning fiscal uncertainty after lawmakers in Washington agreed on a two-year budget.
The labour force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell 0.2 of a percentage point to 62.8 per cent.
The US central bank announced last month that it would trim its monthly bond purchases to US$75 billion from US$85 billion, and many economists expect it to decide on a similar-sized cut at its next meeting at the end of this month.
Economic growth this year is expected to top 3 per cent, a sharp acceleration from the 1.7 per cent forecast for last year.