Approximately 3 million jobs were added. In contrast, in 2008-09, at the height of the effects of the financial collapse, about 5 million jobs were lost. A big reason for the growth is that fiscal policy (austerity) stopped being a drag. However, wage growth and the workforce participation rate leave a lot to be desired.
Jared Bernstein has more:
US payrolls grew by 252,000 last month and by 2.95 million over 2014, making last year the strongest year for job since 1999 (that’s comparing Dec-over-Dec). . . .
Payroll growth was notably strong in this report. November’s big gain was revised up to 353,000, and as my monthly smoother shows, job gains have accelerated over the course of the year, up 289,000 on average over the past three months compared to 246,000 over the full year.
However, there were two clouds in the December report. The labor force participation rate fell two-tenths of a point, fully explaining the decline in unemployment from 5.8% in November to 5.6% last month. Also, after an upside surprise in last month’s report, hourly wages disappointed on the downside in December, down five cents. Moreover, November’s 0.4% wage bump was revised down by half. Thus, in 2014, hourly wages were up 1.7%, a touch below 2013’s 1.9% gain.
In other words, wage growth unquestionably remains a key missing piece from a job market recovery which on most other measures has finally taken hold. Take note, Federal Reserve: this economy clearly has no wage or price pressures that would point towards an early liftoff on interest rates.
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