Washington (Reuters)
The US economy maintained a strong pace of job growth in December, with the unemployment rate falling to 3.5%, but rising borrowing costs in light of the central bank’s fight against inflation could lead to a significant erosion of momentum in the labor market by mid-year.
And the US Department of Labor said in its closely watched report yesterday that nonfarm payrolls increased by 223,000 jobs last month. The November data has been revised to show 256,000 job creation instead of 263,000 before the change. Economists had expected 200,000 jobs to rise in a Reuters poll, and estimates ranged between 130,000 and 350,000 jobs. Monthly employment growth was well above the pace needed to keep pace with the growth of the working-age population.
The unemployment rate fell to 3.5% from 3.6% in November. The government has revised seasonally adjusted household survey data, from which the unemployment rate is extracted, for the past five years. Meanwhile, major Wall Street indexes opened sharply higher as worries about the rate hike path from the Fed eased after the December jobs report.
The Dow Jones Industrial Average rose 125.22 points, or 0.38%, to 33,055.30 points, and the Standard & Poor’s 500 index opened, up 15.27 points, or 0.40 %, to 3,823.37 points. The Nasdaq Composite Index rose 58.72 points, or 0.57%. , at 10,363.96 points, close to its highest level in about a month yesterday.
Against a basket of currencies, the dollar index jumped 0.9% to its highest level in nearly a month at 105.27 overnight. It’s also on track for a weekly gain of more than 1.5%, the biggest since September.
The dollar’s rise lifted the pound to a six-week low of $1.1873. In recent trading, it rose 0.12% to $1.1922
Similarly, the euro fell 0.8% to a three-week low of $1.0515 in the previous session, and was last traded at $1.0519.
