The American economy added 156,000 jobs in December, capping the final full month of President Obama’s term on a tepid note, even as his successor, Donald J. Trump, promises that much bigger gains could be around the corner.þþThe unemployment rate edged up to 4.7 percent, from a post-recession low of 4.6 percent in November, according to the Labor Department report on Friday. Before the announcement, economists had been looking for a gain of 175,000 jobs for the month.þþBut the bigger story in Friday’s report was a better-than-expected showing for hourly earnings, a missing link for many workers until recently in the recovery from the recession. Average hourly earnings rose by 0.4 percent in December, bringing the 12-month increase to 2.9 percent, the best annual performance since the recovery began in mid-2009.þþThe size of that gain also suggests the uptick in wages is not a fluke, but an outgrowth of a tightening labor market where employers have to pay more to hire and retain workers. The Labor Department also revised the job gains in November and December upward by 19,000.þþHiring in the final quarter of 2016 averaged 165,000 a month, well below the 225,000 pace in 2015 and the 248,000 rate in 2014, which was the best showing since the Clinton-era boom of the late 1990s. But taken together, the last three years of job creation did enable Mr. Obama to finish strong after a sluggish start following the Great Recession.þþIndeed, for all his criticism of Mr. Obama’s economic stewardship during the campaign, Mr. Trump inherits an economy that is fundamentally solid. Consumer sentiment, corporate profits and the stock market are all at or near multiyear highs.þþTo be sure, the economic worries that enabled Mr. Trump to capture the Rust Belt and in turn the White House persist: The future for Americans without a college degree or specialized skills is dim; millions of former workers are still on the sideline; and factory jobs are disappearing.þþAlthough it is not reflected in the December figures, many low-wage workers are receiving a raise this year, as 19 states increased the local minimum wage. Some of the increases were substantial, with Arizona, Maine and Washington each raising the floor by $1.50 or more per hour.þþEven in California, where the wage gain is not as steep, rising 50 cents an hour, one in 10 workers has received a raise. And minimum-wage gains can have a spillover effect, pushing up pay for workers just above the bottom salary tier.þþAs on many issues, Mr. Trump has sent conflicting signals on this subject, suggesting at times during the campaign that state increases were justified, but warning in primary debates that wages were “too high.”þþMany Republicans have previously opposed mandated minimum-wage increases, arguing that for every lift, more low-wage jobs are cut or left unfilled as employers struggle with having to pay more and still eke out a profit.þþAmong economists, the costs and benefits of rising minimum wages are the subject of considerable debate, and experts will be watching sectors like retail, restaurants and food service for signs of a dip in hiring, at least in the short term.þþWhile the monthly jobs reports is no longer grist for the campaign trail mill, as it was for most of last year, investors and traders are now closely watching the data for clues to when the Federal Reserve Board may next raise interest rates.þþLast month, the Fed increased interest rates for only the second time in a decade, and policy makers signaled that three more moves could come this year. Some economists think two increases are more likely, and the Fed will take its cues in part from the labor market, as well as fiscal policy under the new administration.þþ
Source: NY Times
