Surprise Jump in Payrolls Reported for December

In the good news/bad news department, the U.S. Department of Labor released December’s payroll numbers Friday morning and more jobs were added last month than economists had expected.

The good news part is fairly obvious, but where does the bad news come in?  Economists had been hoping for tame reading on job growth would compel the Federal Reserve to consider lowering interest rates when they next meet to decide on the price of money.

Economic soothsayers had predicted payrolls in the U.S. would expand by about 100,000 in December.  Today’s numbers show an increase of 167,000.  In addition, October and November’s numbers were revised upward by a cumulative total of 29,000.  Unemployment remained at 4.5%.  Wage growth was also strong.

Since it was the December report for the Labor Department, certain full-year metrics were released for 2006.  For the year, total unemployment came in at 4.6% with 1.84 million jobs created in 2006.  More importantly, wages increased 4.2% in the year, well above the rate of inflation.