Black unemployment drops to lowest since 2007 as US adds 292K jobs
WASHINGTON (AP) — American employers added a strong 292,000 jobs in December, suggesting that the U.S. economy is so far defying global trends and growing at a solid pace.
The Labor Department said Friday that the unemployment rate remained 5 percent for a third straight month. More Americans started looking for work and succeeded in finding jobs. Black unemployment fell from 9.4 to 8.3%. That’s the lowest since September of 2007.
The government also said employers added a combined 50,000 more jobs in October and November than it had previously estimated. Hiring averaged 284,000 a month in the fourth quarter, the best three-month pace in a year.
The strong figures underscore the resilience of the U.S. economy at a time of global turmoil stemming from China’s slowing economy and plummeting stock market. Most economists expect U.S. consumer spending will offset any overseas drag, though many forecast only modest overall growth.
Employers created 2.65 million new jobs last year, an average of 221,000 per month. That makes 2015 the second-best year for hiring since 1999, after 2014’s gain of 3.2 million jobs.
Even as demand for workers grew, average hourly pay actually slipped a penny in December to $25.24 an hour. Still, it has risen 2.5 percent in the past year. That’s only the second time since the recession ended that it has reached that level. Yet it remains below the roughly 3.5 percent pace typical of a healthy economy.
Most aspects of the report were positive. The percentage of adults with jobs rose for the second straight month, though it remains below pre-recession levels.
And many of the new jobs were in higher-paying industries: Construction added 45,000 jobs and health care nearly 53,000. Professional and business services, which includes accountants, engineers, and architects, as well as lower-paid temporary workers, added 73,000 positions.
For months, U.S. employers have steadily added jobs even as global growth has flagged and financial markets have sunk. Stronger customer demand has given most businesses confidence to hire even though some sectors — notably manufacturing and oil and gas drilling — are struggling.
If employers continue to hire steadily and to raise wages consistently, consumers are expected to keep spending.
Still, stumbling growth in countries like China, the world’s second-largest economy, and financial market turmoil could pose long-term challenges for the U.S. economy. A strong dollar and faltering global growth have cut into exports of factory goods.
The dollar has climbed about 10 percent in value in the past year compared with overseas currencies. That has made U.S. goods more expensive globally while lowering the price of imported products.
In November, exports fell to their lowest level in nearly four years and shaved about 0.6 percentage point from the economy’s growth in 2015, according to Goldman Sachs. Most analysts estimate that the economy expanded at a modest pace 2.5 percent last year.
Another blow to manufacturing has been oil prices, which fell to their lowest level in 12 years Thursday. Oil and gas drillers have responded by slashing payrolls and sharply cutting spending on steel pipes and other drilling equipment.
Manufacturing added 30,000 jobs last year, a marked decline from 2014. Yet it makes up just 10 percent of the U.S. economy and oil and gas drilling even less.
For now, Americans are confident enough to buy more homes. Sales of newly built homes jumped nearly 15 percent in 2015 and helped spur building and construction hiring: Construction companies added 215,000 jobs last year, a 3.4 percent gain.
In another sign of consumer health, auto sales rose to a record high last year as cheap gas and low interest rates led to booming sales of SUVs and pickup trucks.
Lower gas prices may have hurt the oil patch, but they should benefit consumers by cutting their gas bills.
Chris Christopher, an economist at IHS, a forecasting firm, estimates that American households saved, on average, $722 last year from cheaper gas. He expects them to save an additional $217 in 2016 given the continuing drop in oil prices.
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