Job growth highest since 1999

WASHINGTON - The United States capped its best year for hiring in 15 years with a healthy gain in December, and the unemployment rate hit a six-year low. The numbers support expectations that the United States will strengthen further this year even as overseas economies stumble.Employers added 252,000 jobs last month and 50,000 more in October and November combined than the government had previously estimated, the Labor Department said Friday. The unemployment rate dropped to 5.6 percent from 5.8 percent in November. The rate is now at its lowest point since 2008.
Still, wage growth remains weak. Average hourly pay slipped 5 cents in December. And one reason the unemployment rate fell had nothing to do with more hiring. Many of the jobless gave up looking for work and so were no longer counted as unemployed.
Even so, nearly three million more people are earning paychecks than at the start of 2014 - the best annual job gain since 1999. Gas prices have also plunged, which will give consumers - the main drivers of the U.S. economy - a further boost in coming months.

Though December's hiring didn't match November's huge 353,000 gain, monthly job growth in the final three months of 2014 averaged 289,000. That was up sharply from the 239,000 average for the third quarter of 2014.

"We are in a recovery that is accelerating," said Michael Strain, an economist at the American Enterprise Institute, a conservative think tank.

The unemployment rate is now near the 5.2 percent to 5.5 percent range that the Federal Reserve considers consistent with a healthy economy - one reason the Fed has been expected to raise interest rates from record lows by midyear.

Yet for now, the plummeting oil prices and weak pay growth are helping keep inflation even lower than the Fed's 2 percent target rate.Most economists forecast that the U.S. economy will expand more than 3 percent this year. If it does, 2015 would mark the first time in a decade that growth has reached that level for a calendar year.

In December, hiring was widespread across most industries. Construction firms added 48,000 jobs, the most since January. Manufacturers gained 17,000.

Overall, American businesses have been largely shrugging off signs of economic weakness overseas and continuing to hire at solid rates. The U.S. economy's steady improvement is especially striking compared with the weakness in much of the world.

Last month, the number of unemployed fell 383,000 to 8.7 million. Fewer than one-third of people out of work found jobs; the rest stopped looking. The percentage of Americans who are either working or looking for work fell back to a 37-year low last touched in September.

The brightening jobs picture has healed some of the deep scars left by the recession. The number of people who have been unemployed for more than six months fell 27 percent last year. And the number working part time who would prefer full-time work dropped 12 percent.