The American job market has been performing tremendously lately, as the United States added about 292,000 new jobs in December and 252,000 new jobs in November. These figures greatly exceeded expectations offered by the Department of Labor. Overall, 2015 was the second strongest year for American workers since 1999.
That being said, the news wasn’t all good, as wages in 2015 did not increase as much as expected. Also, unemployment has continued to hover around 5%. But still, the influx in the job market does support the Fed’s recent decision to increase interest rates. The Fed has stated that interest rates will continue to be gradually increased.
However, these figures do not reflect recent global market downturns stemming from the stock market crashes in China. Nevertheless, it appears that the American economy is moving forward.
Former Federal Reserve economist and current executive at JPMorgan Chase Michael Feroli stated, “Job creation was solid in December. This should calm some fears about the US economy losing growth momentum. It’s reassuring in the backdrop of some recent economic reports that were weak.”
Analysts believe that the job gains in December were supported by mild winter weather across the United States. The leading industries for job gains were temporary assistance services, healthcare, transportation and construction.
Although employers have been rapidly adding workers, rates of pay haven’t shown much of an increase. Average hourly earnings have not had any major increases in the past couple of months. Over the past year, average hourly earnings have increased by 2.5%, which is ahead of the current inflation rate.
The Federal Reserve has spoken positively of the labor market in recent months. In December, Fed officials stated that the improvement in labor market conditions was “substantial”.
A release from the Fed stated, “Members agreed that a range of recent labor market indicators, including ongoing job gains and declining unemployment, showed further improvement and confirmed that underutilization of labor resources had diminished appreciably since early this year.”