Huge Number on Jobs Front

Updated from 9:05 a.m. EST

Job growth was much stronger than expected as last year wrapped up, with U.S. employers adding 167,000 workers to their payrolls in December.

Economists had been anticipating much slower growth. Estimates had forecast that about 100,000 to 115,000 new positions would be created. The unemployment rate remained constant at 4.5%, while average hourly earnings, a key measure of inflation, rose a greater-than-expected 0.5%.

Revisions to the prior data showed more new jobs than had been first reported. Updated payroll numbers for October and November revealed that an additional 29,000 jobs were formed than the government's previous numbers had indicated.

The Federal Reserve will use the information to help them determine the future direction of interest rates. The central bank meets at the end of the month, but no change in the target fed funds rate is anticipated.

On Wednesday, minutes from the Fed's meeting last month were released and signaled that most bankers felt core inflation was staying uncomfortably high.

Traders have been hoping the Fed will cut the fed funds target, the rate banks charge each other for overnight loans, sometime this year. The target has been at 5.25% since June, and the Fed has gone four meetings leaving it unchanged.

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