US economy sees robust jobs growth in December

Hiring has held up, despite the weight of higher interest rates.

In Summary
  • Employers added 223,000 positions in December, pushing the jobless rate down to 3.5%, from 3.6% in November.
  • The resilience of the labour market has raised hopes that the world's largest economy will avoid a severe economic downturn this year.
Image: GETTY IMAGES

Jobs growth in the US remained strong last month even as the economy wrestled with the impact of fast-rising prices.

Employers added 223,000 positions in December, pushing the jobless rate down to 3.5%, from 3.6% in November.

The resilience of the labour market has raised hopes that the world's largest economy will avoid a severe economic downturn this year.

The US central bank is raising borrowing costs to try to cool the economy and ease the price pressures.

But hiring has held up, despite the weight of higher interest rates.

Bars and restaurants, health care firms and construction businesses helped to drive the gains last month.

Average hourly earnings rose by 4.6% from last year. That was a slower pace than in November, in what analysts said was a positive sign for the fight against inflation.

However, it was mixed news for workers, who have not seen their pay rises keep up with prices.

"Worker pay is failing to keep up with the rise in prices at the consumer level. This is a source of stress on household budgets. How that equation unfolds in the months ahead will be key, including whether inflation pressures relent," said Mark Hamrick, senior economic analyst for Bankrate.com.

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