Jobs Growth Is Slightly Soft
Updated from 10:36 a.m. EST
Another month, another mediocre jobs report.
The U.S. economy added 157,000 jobs in December, below the 175,000 consensus estimate and barely enough to keep up with the natural growth in the labor force. More troubling perhaps, average hourly earnings rose a meager 0.1%, below economists' 0.2% target.
After the minutes of the Federal Reserve's policy meeting were released earlier this week, some investors worried that the central bank might abandon its "measured" approach and raise interest rates more aggressively.Fed members said the economic expansion is now "more firmly entrenched," and that cost and price pressures could become a problem without further tightening. The Fed raised rates five times last year in increments of 25 basis points. Still, economists said the sluggish wage gains in December should assuage fears about rising inflation. "Moderate gains in hiring, moderate wages, and a steady unemployment rate this month argue against a more aggressive timetable from the Fed just yet," said Steven Wieting, senior economist at Smith Barney. Stocks were slightly higher in morning trade, with the Dow up 3 points at 10,626 and the Nasdaq up by 1 at 2,091. Long term bonds were also in positive turf, with the yield on the 10-year Treasury note falling to 4.26%. Ian Shepherdson, chief economist at High Frequency Economics, noted that last month's employment data were actually boosted by favorable seasonal adjustments and by gains at the state and local government level. "Core job gains are softer than
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