WASHINGTON— U.S. employers added 145,000 jobs in December and the unemployment rate held steady at 3.5 percent, signaling that the job market remains strong at the start of 2020 even if hiring and wage gains have slowed somewhat more than a decade into an economic expansion.
Friday’s snapshot from the Labor Department showed hiring slipped from robust gains of 256,000 in November, which were given a boost by the end of a strike at General Motors. For the year, employers added an average of roughly 175,000 jobs per month, compared with about 223,250 per month in 2018.
Annual wage growth fell in December to 2.9 percent, down from an annualized average of 3.3 percent a year earlier, a possible sign that some slack remains in the labor market and that unemployment could fall even further from its current half-century low.
The picture of a slowly-but-steadily improving economy plus low inflation likely gives the Federal Reserve comfort in keeping interest rates low, which has been a boon to stock markets. The Dow Jones Industrial Average fell a slight 0.34 percent in Friday afternoon trading, but it briefly climbed to a record-level of 29,000 in the morning.
“We’re starting 2020 in very good shape,” said Gus Faucher, chief economist at PNC Financial Services. “We should see continued economic expansion throughout 2020 driven by consumers.” The state of the job market has become a pivotal division between President Donald Trump and his Democratic challengers. Trump can campaign on the low unemployment rate and job growth as he seeks a second term. Democrats, seeking to oust him, will point to wages that have not taken off in a meaningful for many Americans coping with high costs for medical care and higher education. This is the last jobs report before the Iowa caucus in February that will serve as a first step for choosing the Democratic presidential nominee.
The prospect of a stable job market, a pick-up in global growth, supportive central banks, an easing of trade tensions and U.S. economic growth of around 2 percent should be a positive for this year.
“We really have the wind at our backs going into 2020,” said Julia Pollak, a labor economist at the employment marketplace ZipRecruiter.
Yet job growth has failed so far to translate into substantially better hourly pay. There is the potential that wages jumped in January as many states adjusted their minimum wages.