The U.S. economy created a surprising 200,000 new jobs in December as the unemployment rate continued to trend down at 8.5 per cent.
The Bureau of Labour Statistics said gains in transportation and warehousing, retail trade, manufacturing, health care and mining were responsible for the strong figure. Economists were expecting the figure to come in closer to 150,000.
"I wouldn’t take the 8.5 per cent unemployment rate as a great sign, however, in that it is entirely likely that should job growth prove resilient, discouraged workers are likely to return to markets seeking employment and thereby put upward pressure on the size of the labour force and the unemployment rate," Scotiabank economist Derek Holt said in reaction to the news.
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Pace of gains increasing
There are now 13.1 million officially unemployed people in the U.S., and the jobless rate inched slightly lower to 8.5 per cent. The rate has dropped by 0.6 percentage points since August.
The figure caps a streak of six consecutive months in which the U.S. economy has created at least 100,000 new jobs. That hasn't happened since April 2006. The world's largest economy added 1.6 million jobs in 2011 as a whole, better than the 940,000 added in 2010.
"There is no question that today's employment report is a positive and there is also no question that the pace of job growth has accelerated of late," said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm.
The news is certainly welcome to U.S. President Barack Obama, who is facing an election this year that increasingly looks to hinge on the economy. The U.S. unemployment rate sat at 7.8 per cent when he took office, so whether it's a fair comparison or not, his Republican enemies will no doubt pounce on the fact that it now much higher than that.
The jobless rate averaged 8.9 per cent last year, down from 9.6 per cent the previous year.