The United States added 292,000 jobs in December in a sign of gradual growth in the world’s largest economy but a global slump in commodity and oil prices continued to weigh on the mining industry with 8,000 job cuts in the month.
The total employment in 2015 was 2.65 million following 3.1 million gain in 2014, showing best gains for two consecutive years since 1998-99.
The unemployment rate for December remained unchanged at 5.0 percent, or 7.9 million, for the third straight month, according to U.S. Bureau of Labor Statistics released Jan. 8. This is almost half from the peak of 10 percent in 2009.
Among the major worker groups, the month was good for blacks who posted 8.3 percent decline in unemployment rate in December.
Professional and business services led the employment gains with 73,000 new jobs, with temporary help services accounting for 34,000 employment opportunities. In 2015 as a whole, professional and business services added 605,000 jobs, compared with a gain of 704,000 in 2014.
The new job data, which also include revised figures for October and November showing 50,000 more jobs than previously reported, coupled with raise of 2.5 percent in December wages from a year ago, are good news for $18.1 trillion U.S. economy, which is mainly driven by American consumers.
Real gross domestic product – the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, increased at an annual rate of 2.0 percent in the third quarter of the 2015 after posting a 3.9 percent growth in the second quarter.
Global growth estimated at 2.4 in 2015 fell short of expectations, but is expected to pick up modestly to a 2.9 percent in 2016, according to the World Bank’s January 2016 Global Economic Prospects. Falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity was blamed for the sluggish growth.
For 2015, the World Bank expects the U.S. economy to grow at 2.5 percent. Domestic demand was supported by robust consumption and dynamic investment outside the oil sector, according to the report.
In contrast, net exports remained a drag on growth and industrial activity continued to be subdued in the second half of 2015. Household real disposal income has been boosted by employment gains, declining oil prices and moderate wage growth, the World Bank said.
“The decline in net exports is a principal factor dampening growth at present. This is the result of the strength of the dollar and the softness in external demand, particularly from large emerging markets,” the Bank report said. “Reflecting in part asynchronous monetary policy stances among major central banks, the dollar has appreciated more than 20 percent in nominal effective terms – and 18 percent in real effective terms since mid-2014.
Job market’s progress encouraged the Federal Reserve raise the interest rate for nearly 10 years in December – a quarter of a percent to between 2.25 percent and 0.5 percent. The Fed expects the growth to continue in 2016.
Not all is good on the employment front as the mining sector continues to take hit from the falling oil and global commodity prices. Mining sector cut 8,000 jobs in December, taking the total for the full year to 129,000 jobs lost.
Oil prices are likely to continue their present streak because of global economic slump led by China, the world’s second-largest economy. Sliding growth in China’s services sector has fueled concerns about slowing oil demand from the country, the world’s biggest net importer.
Other factors that will likely continue to depress global oil prices are huge oversupply in global oil markets, drop in global demand for oil, the advent of shale oil boom in the United States and return of historically large oil producers such as Iraq and Iran.
