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FXstreet.com (Barcelona) - Paul Ashworth, Chief US Economist at Capital Economics notes that the 155,000 increase in US non-farm payrolls in December is yet another month of job growth that is just about enough to keep pace with the underlying growth in the labour force, but not enough to drive the unemployment rate markedly lower.

He writes, "This has been the story throughout the recovery that began more than three years ago. The unemployment rate remained unchanged at a still elevated 7.8% last month, with November's figure being revised up from 7.7%. Admittedly, the 155,000 gain is perhaps better than it looks given that firms were probably nervous about adding workers with the fiscal cliff looming."


However, he notes that that gain also included an additional 30,000 construction jobs that were probably a result of the temporary boost from post-Sandy rebuilding. Retail employment actually fell by 11,000 in December, suggesting that the holiday shopping season ended with a whimper. The 11,000 drop in courier jobs also suggests that online shopping was down a little.

There were some positive signs in this report. Average hours worked edged up to 34.5, from 34.4. Average hourly earnings increased by 0.3% m/m and, thanks to upward revisions to past months' gains as well, earnings increased by 2.1% over last year as a whole.

Ashworth finishes by writing, "Nevertheless, the overall picture is that the labour market remains lacklustre. If this state of affairs continues throughout most of this year, as we expect, then it is hard to see the Fed dialing back or stopping its QE purchases as some officials currently envisage."

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