NEW YORK (TheStreet) -- Stocks declined Friday morning as wage growth slipped unexpectedly in December. However, despite the effect on overall inflation, wage growth won't likely be an impediment to a Federal Reserve rate hike, according to some analysts.
"The Fed has stated its desire to see wage growth accelerate before it tightens policy; but it was also made clear in the December minutes this week that rate hikes could occur even if inflation is floundering. For now, as the Fed doesn't consider the drop in inflation anything more than transitory, it's unlikely that the wage figures ruffle too many feathers," said DailyFX currency analyst Christopher Vecchio in a note.
Average hourly earnings fell 0.2% in December after increasing 0.2% the month earlier, the Labor Department said Friday. For the year, earnings posted their smallest gain since October 2012, up just 1.7%.
"What it basically shows is that the average worker is keeping his head above water but he's not really doing a lot better," said Gary Thayer, Wells Fargo head of global macro strategy, in a call.
On the upside, however, a fall in the unemployment rate to 5.6% marked its lowest level since June 2008 and it could keep falling to below 5% by year-end, according to Deutsche Bank analyst Oksana Poltavets. Economists had expected the unemployment rate in December to fall to 5.7% from 5.8% in November.
The latest jobs report closes out a year with the best employment gains in 15 years. The U.S. added 252,000 jobs in December, coming in better than a forecast increase of 240,000. This marks the 11th consecutive month of job gains above 200,000. November's blockbuster jobs number was upwardly revised to an even better 353,000.