Global stock markets have been tumbling, China’s economic growth appears to be slowing faster than expected and many key world economies are struggling.
But new data show the U.S. job market is getting stronger.
The Labor Department said Friday that the nation added 292,000 net new positions in December, ending another robust year in which payrolls grew by nearly 2.7 million.
Combined with 2014’s even stronger gain of 3.1 million jobs, the U.S. has produced the best back-to-back years of labor market growth since the Internet boom of the late 1990s.
“With storm clouds remaining over much of the global economy, the U.S. economy isn’t all sunshine but there are sufficient number of glimmers to give us something to smile about,” said Mark Hamrick, Washington bureau chief of financial information website Bankrate.com.
“The U.S. continues to perform well in the face of the global economic maelstrom,” he said.
December’s surprisingly robust job growth and an acceleration of hiring over the last three months of the year showed the U.S. economy is strong enough to withstand the economic problems in China and elsewhere, analysts said.
With its own consumers responsible for about two-thirds of economic activity, the U.S. is largely insulated from the troubles around the globe. But that could change if the world economic situation gets significantly worse and shakes the confidence of U.S. consumers and businesses.
Although low oil prices have slammed the nation’s energy industry and the strong dollar has hurt export-driven manufacturing, other sectors are in good shape because they depend on the domestic market, said John Canally, chief economic strategist at LPL Financial, a brokerage and investment advisory firm.
“Only about 10% of employment is manufacturing,” he said. “The other 90% of the economy is doing fine.”
The news came as 2016 got off to a rocky start. Even the positive jobs report wasn’t enough to offset a flurry of late selling that pushed the market to its worst week in four years. The Dow closed at 16,346.45, down 167.65 points, or 1%. The Standard & Poor’s 500 index dropped 21.06 points, or 1.1%, to 1,922.03.
But in a sign that the U.S. economy is hanging tough, job growth last month was broad-based.
The unemployment rate held steady at 5%, the lowest since early 2008, as about 466,000 more people joined the labor force.
The unemployment rate was 6.7% at the end of 2013, and the significant improvement was a key factor in the Federal Reserve’s decision last month to raise a key interest rate for the first time in nearly a decade.
Overall, the labor force increased by 1.7 million people in 2015. That was the biggest expansion since 2006, before the Great Recession hit.
The Labor Department also boosted job-growth figures for October and November by a combined 50,000 net new positions. That meant that for 2015, the U.S. added an average of about 221,000 jobs a month.
The figure was down from 260,000 the previous year. But job growth was accelerating as 2015 closed. The labor market added an average of 284,000 net new jobs over the final three months of the year.
The jobs report initially boosted U.S. stocks. But lingering concerns about the global financial situation, triggered this week by market turmoil in China, pushed the Dow Jones industrial average down 167.65 points, or 1%, to close at 16,346.45.
The one key discouraging sign in Friday’s report was a slight drop in average hourly earnings after two strong monthly gains. But economists said that could be a one-month anomaly and noted other data on worker compensation, which also includes healthcare and benefits, have been moving higher.
Average hourly earnings declined by 1 cent to $25.24 after rising 5 cents in November. Still, earnings increased 2.5% last year, which was well above the low rate of inflation and the best annual gain since the Great Recession.
“In a normal year with normal inflation, 2.5% wage growth would be nothing to crow about,” said Harry Holzer, a professor of public policy at Georgetown University and coauthor of the 2011 book “Where Are All the Good Jobs Going?”
“Last year, inflation was close to zero because of falling oil prices,” he said, so “at least there’s some real wage growth.”
The December job growth exceeded forecasts of a gain of about 200,000 net new positions and was an improvement over November’s revised 252,000 figure.
The construction industry added a robust 45,000 jobs in December, possibly benefiting from warmer than normal temperatures in much of the country.
The industry added 263,000 net new jobs last year, down from 338,000 the previous year.
Hiring in the manufacturing industry, another well-paying sector, improved last month. The U.S. added 8,000 manufacturing jobs after payrolls increased by just 2,000 the previous month.
It was a small positive sign for a sector that struggled through much of the year as the rising value of the dollar and slowing economies abroad dampened the demand for U.S. exports.
Last year, manufacturing added 30,000 net new positions, down sharply from 215,000 the previous year.
Mining continued to be a drag on job growth because of low oil prices. The sector shed 8,000 jobs in December, though that was an improvement over the 11,000 positions lost the previous month.
The mining industry lost 129,000 net positions last year after adding 41,000 jobs in 2014.