US economy marks 10th straight year of jobs gains, but …

Some winning streaks are impressive. But the one the United States jobs market is on can rightly be described as epic.

The US economy added 145,000 jobs in December, said the US Department of Labor on Friday, closing out the decade with a tenth straight year of labour market gains.

Ten consecutive years of jobs growth is a record for the world’s largest economy. But that milestone was tempered in part by a weaker-than-expected headline number (analysts had forecast approximately 160,000 jobs created last month), a modest December annual wage increase of only 2.9 percent, and a revision that trimmed 14,000 jobs from the payroll figures for October and November.

Meanwhile, there are some massive downward revisions to previous months’ payroll numbers looming. The annual benchmark revision is scheduled to be released next month with the January US jobs report.

Still, unemployment is hovering comfortably at a 50-year low of 3.5 percent. And the economy is creating enough jobs to comfortably absorb the estimated 100,000 new entrants into the labour force each month.

So, while America’s jobs machine is getting older and slower, it is still humming along.

Friday’s employment report, along with other recent data, is feeding expectations that the US economy could accelerate in the second half of this year, after growth slowed to 2.1 percent in the third quarter of last year.

“Overall, the solid jobs figures add to the evidence from the incoming activity data, which suggest the economy is nearing a turning point, with economic growth likely to bottom out close to 2.0% annualised and reaccelerate back above trend in the second half of 2020,” wrote Capital Economics senior US economist Micheal Pearce in a note to clients.

The jobs report is a closely watched barometer of the US economy, and the December jobs figures bolster the view from the US Federal Reserve that interest rate policy and the economy are in a “good place”.

Last year, the Fed cut borrowing costs three times in an effort to keep the US economy on track as it came down from the stimulus high of the Trump administration’s tax cuts and weathered headwinds from slowing global growth and the US-China trade war.

In December, the Fed signalled that it is likely to keep interest rates unchanged this year. And next week, the US and China are set to sign a “phase one” trade deal.

But the trade war the Trump administration is waging against China has had negative consequences for US manufacturing, which shed 12,000 jobs in December. And the Institute for Supply Management’s December gauge of US factory activity dropped to its lowest level in a decade.