US job growth cools slightly

The pace of hiring by US employers eased slightly in December, pointing to a lacklustre pace of economic growth that was unable to make further inroads in the country's still high unemployment rate.

Payrolls outside the farming sector grew 155,000 last month, the US Labor Department said today. That was in line with analysts' expectations and slightly below the level for November.

Gains in employment were distributed broadly throughout the economy, from manufacturing and construction to health care.

That should reinforce expectations that the economy will grow about 2 per cent this year, unlikely to quickly bring down the unemployment rate or make the U.S. Federal Reserve rethink its easy-money policies, which have been propping up the recovery.

"It's not a booming economy, but it is growing," Jim O'Sullivan, an economist at High Frequency Economics in Valhalla, New York, said before the data was released.

The jobless rate held steady at 7.8 per cent in December, down nearly a percentage point from a year earlier but still well above the average rate over the last 60 years of about 6
per cent.

The US Labor Department raised its estimate for the unemployment rate in November by a tenth of a point to 7.8 per cent, citing a slight change in the labor market's seasonal swings.

Most economists expect the US economy will be held back by tax hikes this year as well as by weak spending by households and businesses, which are still trying to reduce their debt burdens.

Today's data nonetheless gave signals of growing momentum in the labor market's recovery from the 2007-09 recession. Many economists had expected December's payroll gains to be padded by one-time factors like the recovery from a mammoth storm that hit the East Coast in late October.

The government had said last month the storm had no substantial impact on the November data, and many economists expected the government to recant by revising downward in
today's report its estimate for payroll gains in November. Instead, the government revised its estimate for November payrolls upward by 15,000.

"There is some evidence that underlying jobs growth has improved," Paul Dales, an economist at Capital Economics in London, said before the report was released.

Reuters