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Employers add 155,000 jobs in December, but unemployment rate still 7.8%

WASHINGTON — U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during the tense negotiations over the "fiscal cliff" budget deal.

The solid job growth wasn't enough to reduce the unemployment rate, which remained 7.8 percent last month, the Labor Department said Friday. The rate for November was revised up from an initially reported 7.7 percent. Also, the government said hiring was stronger in November than it first estimated. November's job increases were revised up 15,000 to 161,000.

The "gain is perhaps better than it looks, given that firms were probably nervous about adding workers with the fiscal cliff looming," said Paul Ashworth, an economist at Capital Economics.

For 2012, employers added 1.84 million jobs, an average of 153,000 jobs a month, roughly matching the job totals for 2011.

Robust hiring in manufacturing and construction fueled the December job growth. Construction companies added 30,000 jobs, the most in 15 months. That increase probably reflected hiring needed to rebuild after Hurricane Sandy and also gains in home building that have contributed to a housing recovery.

Manufacturers added 25,000 jobs, the most in nine months.

Other higher-paying industries also added jobs. Professional and business services — a category that includes positions in information technology, management and architecture — gained 19,000. Financial services added 9,000. Health care added 55,000.

Lower-paying industry sectors were mixed. Restaurants and bars added 38,000 jobs. Retailers cut 11,300, a sign that the holiday shopping season might have been sluggish. But those cuts followed three months of strong gains.

All of the job gains last month came from private employers. Governments shed 13,000 jobs, mostly in local school systems.

Friday's report did point to some weakness in the job market. For example, the number of unemployed people actually rose 164,000 to 12.2 million.

The unemployment numbers come from a government survey of households; the number of jobs added each month comes from a separate survey of businesses.

A broader category that includes not only the unemployed but also part-time workers who want full-time jobs and people who have given up looking for work was unchanged in December at 22.7 million.

Most economists expect little improvement in hiring this year. A 2-percentage-point cut in the Social Security tax expired Jan. 1. That means a household with income of about $50,000 will have about $1,000 less to spend. And the government will may impose spending cuts this year.

Both the higher taxes and the spending cuts, along with uncertainty about future budget fights, could restrain growth and hiring.

That "likely means acceleration in the labor market will remain elusive for the time being," said Ellen Zentner, an economist at Nomura Securities.

.Fast facts

Other reports

Here is a summary of other economic reports released Friday:

• A gauge of U.S. service firms' activity expanded in December by the most since February, driven by a jump in new orders and hiring. The Institute for Supply Management said Friday that its index of nonmanufacturing activity rose to 56.1 in December from 54.7 in November. Any reading above 50 indicates expansion. The ISM report measures service growth in industries that cover 90 percent of the workforce, including retail, construction, health care and financial services.

U.S. companies boosted their orders in November for manufactured goods that reflect investment plans, even though total orders were unchanged for the month, the Commerce Department said Friday. Durable goods, everything from autos to steel, rose 0.8 percent, while nondurable goods fell 0.6 percent, reflecting falling petroleum prices. Orders for core capital goods, a category considered a proxy for business investment plans, increased a solid 2.6 percent after a 3 percent rise in October, which had been the strongest gain in 10 months.

by the numbers

155,000 Number of jobs that U.S. employ­ers added in December.

7.8 % U.S. unemploy­ment rate, unchanged from November.

1.84M Jobs that U.S. employ­ers added in 2012.

Employers add 155,000 jobs in December, but unemployment rate still 7.8% 01/04/13 [Last modified: Friday, January 4, 2013 8:19pm]

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