US economy adds less jobs than expected but wages rise at fastest pace in seven years

The US economy added less jobs than expected last month, but wages increased at the fastest pace since 2009, official figures released on 6 January showed.

According to the US government, the world's largest economy created 156,000 jobs in December, slightly below 175,000 analysts expected, while November's gains were revised up from 178,000 to 204,000. October's figure, however, was trimmed to 135,000 from 142,000.

Meanwhile, the unemployment rate fell rose from a nine-year low of 4.6% to 4.7%, in line with analysts' expectations.

After declining in November, average hourly earnings rose 0.4% last month, while hourly pay increased 2.9% year-on-year, marking the fastest 12-month increase since a recovery that began in mid-2009.

"This report tells the Fed not to delay further
tightening," said Ian Shepherdson, chief economist
at Pantheon Macroeconomics.

"We think rates will rise again as soon as March, provided we have some clarification on the likely extent of fiscal easing by then."

The latest payrolls tally brought the total for 2016 to 2.16 million, slightly lower than the 2.7 million jobs that were added in the previous year. However, the figure marked the sixth consecutive year the US economy has added at least two million jobs over 12 months, the longest streak since 1999, when Bill Clinton was at the White House.

Naeem Aslam, chief market analyst at Think Markets UK, added the report was solid and did not present any pressing short-term problems for US policymakers.

"Most of the emphasis was towards the wage growth and labour participation rate and the data has shown that wage growth has shown a positive number while the participation rate was steady," he said.

This has painted an image the [Donald] Trump administration is going to have a very close look at this number and they will advise the president-elect how to boost hiring."