Posted by Dave Lorenzo - Business Coach

Nonfarm payrolls increased by 167,000 jobs, the biggest advance in three months, the Labor Department said Friday, and the unemployment rate was unchanged at 4.5%

The source for U.S. employment growth in December was the service sector, where payrolls rose by 178,000 jobs. Retailers eliminated 9,000 jobs, but leisure and hospitality businesses added 31,000 jobs and professional- and business-services companies created 50,000 jobs. Education and health-services firms added another 43,000 jobs.

Outplacement firm Challenger, Gray & Christmas said Thursday that job cuts announced by U.S. corporations in December decreased by 29% from November. Announced job cuts for December totaled 54,643 compared with 76,773 in the prior month and 107,822 in December 2005.

What does this mean?  Here’s what the economists are saying:

“The solid jobs growth shows an economy holding up well despite the hit from the downturn in the housing sector and the autos industry,”  – Nigel Gault of Global Insight

“A uniformly strong report. Three key signs of strength: 1) strong payrolls growth despite housing and manufacturing drag; 2) unchanged unemployment rate combined with rising labor force participation and 3) strong wage gains suggesting that 1) and 2) above are not flukes but represent real labor market strength”. – Drew Matus, Lehman Brothers Global Economics

“These data purport to show very little cross-infection from the manufacturing slowdown and construction crunch into the rest of the economy. This does not mean it will not happen in the future, but it does mean that the pressure we expected to see on the Fed to ease in the first quarter has not yet materialized. … we now pencil-in May for the first [Fed rate] move.” –  Ian Shepherdson, High Frequency Economics

Source:  The Wall Street Journal

 

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