The economy added 200,000 jobs in December and the unemployment rate fell to 8.5 percent, the Labor Department reported on Friday.
Economists surveyed by Bloomberg
ahead of the release expected payrolls to add 155,000 jobs and the unemployment rate to rise to 8.7 percent. It takes about 90,000 new jobs every month just to keep pace with population growth.
Employers added 100,000 jobs in November, a 20,000-job downward revision from earlier reports. The surprising drop in unemployment from 9.0 to 8.6 percent in November was partly due to job seekers becoming discouraged and no longer looking for work.
In December, the labor force participation rate held steady, suggesting that the drop in unemployment was due to payrolls growing rather than discouraged job seekers. The U-6 number, a broader measure of unemployment than the headline unemployment rate, fell from 15.6 percent in November to 15.2 percent in December.