The U.S. unemployment rate rose one-tenth of a percent to hit 4.7 percent in December. Friday's report from the Labor Department says the economy had a net gain of 156,000 jobs in December.
The economy created 2.2 million jobs over the year, which is less than the prior year.
The data show wages grew around four-tenths of a percent, or 10 cents an hour. Wages grew 2.9 percent over the last year, which is the fastest rate in several years and above the rate of inflation.
December's job growth was a bit less than economists expected, but still a "solid" performance, according to IHS Market Chief Economist Nariman Behravesh.
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Economist Jed Kolko of the job website Indeed says December's report shows a year of "solid recovery" in the job market. More people are "back at work than at any point since the recession," he said, but added that the economy faces long-term challenges because fewer adults are working than before the recession and manufacturing is still lagging.
The relatively low unemployment rate still leaves 7.5 million people out of jobs, and another 5.6 million who work part-time jobs but want full-time work. If these groups are added to the number of people officially unemployed, the "underemployment" rate is 9.2 percent.
A separate report from the Commerce Department says the U.S. trade deficit rose nearly 7 percent in November. Friday's data show the gap between what Americans sell abroad and what they buy from foreigners was $45.2 billion. Exports including aircraft, autos and farm products declined slightly while imports, including oil, rose more than one percent.
Analysts say the strong dollar means U.S.-made goods are more expensive on global markets, while imports are easier to buy. Wells Fargo economists say faltering exports are likely to be a "significant drag" on U.S. economic growth for the last few months of 2016.