US economy created more jobs than expected in December

Job growth in the US in December outstripped economists' forecasts, although hourly wages again lagged behind projections.

The change in non-farm payrolls expanded to 292,000 in December, according to the Bureau of Labor Statistics.

That was higher than the median forecast from economists for a 200,000 gain in payrolls.

Revisions to the readings for the prior two months tacked on a further 50,000 positions to the tally.

However, average hourly earnings for the month remained flat month-on-month despite a forecast consensus of 0.2% growth.

In comparison to a year ago, earnings grew 2.5%, higher than November's increase of 2.3% but below the 2.7% growth projected by economists.

The private service sector created the lion's share with 230,000 new jobs, with education and health services adding 52,600 jobs and temporary-help services contributing 34,400 jobs.

The largest jump in the private goods producing sector came from construction, which added 45,000 new jobs.

An index of aggregate weekly hours rose 0.3 point month-on-month after a dip of 0.1 points in November.

The labour-force participation rate ticked up 0.1 percentage points to 62.6%.

On the back of the data, Bill Gross from Janus Capital told Bloomberg TV he was sceptical that the Fed could raise interest rates three or four times in 2016 given the levels of indebtedness in the economy.

As of 13:49 the yield on the interest rate sensitive two-year US Treasury note was three basis points higher to 0.97%.

Stocks reverted early gains to see the week out lower as copper and oil markets continued to come under pressure despite much larger than expected job gains for December in the US, although wage growth undershot analysts’ forecasts again. Worries about China also continued to hound investors. Against that backdrop, after today’s data Stateside Barclays said to clients that:

On a more constructive note, analysts at Barclays said Friday's job figures suggested labor market momentum remained "firmly" in place.

Nonetheless, “trends in private consumption growth and other components of domestic demand bear further watching, particularly if labor markets were to slow in the months ahead or if the headwinds from abroad were to intensify substantially," analysts Michael Gapen, Rob Martin and Jesse Hurwitz said in a research note sent to clients.