US unemployment drops
January 9, 2015
The United States' unemployment rate fell to 5.6 percent, but hourly wages also unexpectedly dropped, dampening otherwise rosy economic data released Friday.
The 0.2 percent, or five-cent, fall in wages perplexed analysts because the economy has been showing signs of improvement. It appeared to be a sign that workers may still have to wait before feeling the full effect of a tightening labor market.
Labor Department data showed nonfarm payrolls increasing by 252,000 last month after an upwardly revised rise of 353,000 in November. The unemployment rate fell to a 6.5-year low of 5.6 percent but the statisticians noted that this was mainly due to a fall in overall labor participation as people left the labor market.
December marked the 11th straight month of payroll increases over 200,000 - the longest rally since 1994. In 2014 on the whole, the economy added 2.95 million jobs, the strongest annual performance since 1999, bringing it close to territory that the Federal Reserve regards as being on par with full employment.
Unemployment fell by a total of 1.1 percent last year.
Employment gains were felt in all sectors of the economy, the Labor Department said, underscoring its forecasts of strong growth in 2015.
Construction employment was up by 48,000, the largest jump since last January. Manufacturers hired an additional 17,000 workers, while government employment swelled by 12,000 positions.
Examining the unforeseen wage contraction, researchers at the San Francisco Federal Reserve Bank suggested it could have been due to employers' reluctance to limit wages during the recession, for which they were trying to compensate now by keeping wages steady.
The less-than-rosy data also seemed to validate the Federal Reserve's take-it-slow attitude toward raising overnight interest rates. Those rates have been kept near zero since 2008.
cjc/sms (Reuters, dpa, AP)