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US Unemployment Drops to 6-Year Low


U.S. Unemployment Rate: Monthly, Jan. ‘04 – Dec. ‘14

The U.S. unemployment rate dropped two-tenths of a percentage point in December to a six-year low of 5.6 percent, the Labor Department said Friday.

A report from the department said the economy had a net gain of 252,000 jobs. Updated information also showed job gains in October and November were larger than first thought.

Both December figures were better than most economists had predicted and capped the strongest year of job growth in 15 years.

US Unemployment Drops to 6-Year Low
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Job gains were spread across all sectors: in professional and business services; in construction and retail; and in federal, state and local government.

The one sour note involved wages. Average hourly earnings fell 5 cents in December, eliminating wage gains from the previous month. Ahu Yildermaz who heads the research division at payroll processing firm ADP, said that "to sustain the job growth in the economy, we need to get better wages."

Yildermaz said lower oil prices should help give consumers more disposable income.

Other external factors including economic weakness in Europe and Japan could still have an impact on U.S. growth. But analyst Mark Hamrick of said unemployment is likely to stay low in 2015 with job growth above 200,000 each month.

“We do expect the unemployment rate will continue to remain in that mid-to-low-5 percent range," he said, adding that an increase in interest rates by the Federal Reserve could come this spring or summer.

While the unemployment rate has fallen a full percentage point over the last year, 8.7 million people remain jobless, and another 6.8 million want full-time jobs but can find only part-time employment.

Despite Friday's mostly upbeat report, global stock prices fell on new worries about falling oil prices and continuing tepid growth around the world.