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US job growth fell sharply in December | |
(35 minutes later) | |
The US economy created only 74,000 jobs in December, with many Americans giving up looking for work, latest figures show. | |
The number of jobs created was the lowest for three years and was well under half the number expected by analysts. | |
The US unemployment rate fell to a five-year low of 6.7%. | |
However, that was mostly due to a drop in the number of Americans looking for work as they become discouraged. | |
The US had bad weather in December, which may have stalled hiring plans. | The US had bad weather in December, which may have stalled hiring plans. |
The labour force participation rate - a closely watched measure - fell noticeably. The share of Americans who are either working or looking is now 62.8%, close to 35-year lows. | |
The government counts people as unemployed only if they say they are actively searching for work. | The government counts people as unemployed only if they say they are actively searching for work. |
The leisure, manufacturing and services sectors added jobs in December, but construction cut 16,000 jobs, the biggest drop in the industry in 20 months. | The leisure, manufacturing and services sectors added jobs in December, but construction cut 16,000 jobs, the biggest drop in the industry in 20 months. |
Steam | Steam |
In the four months before December, the average number of jobs created in the US was 214,000 a month. | In the four months before December, the average number of jobs created in the US was 214,000 a month. |
Other figures on employment have suggested a healthy jobs market, and the Labor Department said 38,000 more jobs in November were created than the 203,000 previously reported. | Other figures on employment have suggested a healthy jobs market, and the Labor Department said 38,000 more jobs in November were created than the 203,000 previously reported. |
Overall, the US economy is picking up steam, with recent figures for consumer spending, trade and factory output all strong. | Overall, the US economy is picking up steam, with recent figures for consumer spending, trade and factory output all strong. |
This year, economists expect the US economy to grow by 3%, well up on the 1.7% last year. | This year, economists expect the US economy to grow by 3%, well up on the 1.7% last year. |
The improving picture led the US central bank, the Federal Reserve, to start to taper its massive monetary stimulus programme from $85bn a month to $75bn. | The improving picture led the US central bank, the Federal Reserve, to start to taper its massive monetary stimulus programme from $85bn a month to $75bn. |
If the Fed remains confident about the direction of the economy, it may trim this back further at its next meeting at the end of this month. | If the Fed remains confident about the direction of the economy, it may trim this back further at its next meeting at the end of this month. |
The meeting will be the last one chaired by Ben Bernanke, who will leave the post after eight years. | The meeting will be the last one chaired by Ben Bernanke, who will leave the post after eight years. |
He will be replaced by Janet Yellen on 1 February. | He will be replaced by Janet Yellen on 1 February. |
Chris Williamson, the chief economist at Markit, said: "A steep fall in unemployment in December ups the odds of further Fed tapering. | Chris Williamson, the chief economist at Markit, said: "A steep fall in unemployment in December ups the odds of further Fed tapering. |
"Although non-farm payroll growth was disappointingly low, one month of weakness doesn't represent a trend and, with other economic indicators showing robust growth toward the end of last year, talk will intensify about when interest rates should start rising if we see a resumption of robust employment growth in January." | "Although non-farm payroll growth was disappointingly low, one month of weakness doesn't represent a trend and, with other economic indicators showing robust growth toward the end of last year, talk will intensify about when interest rates should start rising if we see a resumption of robust employment growth in January." |