The U.S. job market capped its weakest year of growth in nearly a decade with a tepid December payroll report that highlighted modest wage gains – despite the lowest unemployment rate in 50 years holding tight.
U.S. employers added a net new 145,000 jobs in the final month of the decade, according to the Commerce Department's payroll report released on Friday, down from a revised 152,000 gain in November and below the consensus forecasts of 160,000.
Average hourly earnings increased by 3 cents last month to $28.32. The unemployment rate held steady at 3.5%.
The numbers marked a muted end to a year - and decade - in employment growth, framed by dramatic shifts away from manufacturing and full-time positions to the rise and growth of the "gig" economy, which has continued to put Americans to work and padded their pockets with cash, fueling the U.S. economy in the process.
Employers added a total of 2.11 million jobs last year, less than 2018’s gain of 2.68 million.
"While this morning’s number is lighter than expected, make no mistake – it is very meaningful growth," said Mike Loewengart, vice president of investment strategy with E*Trade. "This reading shouldn’t change things for the (Federal Reserve) as growth continues, albeit at a slower pace."
Stocks set fresh record highs and the Dow Jones Industrial Average topped 29,000 – an indication that investors see the moderate job growth numbers as confirmation that the Federal Reserve will continue to keep benchmark interest rates low.
The Fed has telegraphed a "wait-and-see" stance on interest rates following three rate cuts in 2019.
CME Group futures prices suggest little chance of an interest rate hike from the Fed this year, with the balance of bets on rates staying in the 1.5% to 1.75% range for the whole of 2020.
Somewhat surprising was the total of 14,000 positions taken out of the 2019 employment picture, thanks to downward revisions in both November and October. October's figure was reduced by 4,000 jobs to 152,000, while the October number was cut by 10,000 to 256,000.
"The biggest negative about this report is that it was a bit of a letdown for a market that’s been rallying for months in anticipation of accelerating earnings in 2020," said Alec Young, managing director of Global Markets Research, FTSE Russell.
"Set against the backdrop of very high expectations, it may be difficult for this largely neutral report to spark positive investor enthusiasm,” Young said.
Most of December's jobs came from the construction and retail sectors. Health care and professional services also grew, albeit at a slower pace. Employment fell in manufacturing and transportation and warehousing.
Meantime, the share of Americans working or looking for work - the so-called labor-force participation rate - held steady at 63.2%.