The Bureau of Labor Statistics reported that U.S. employers expanded their payrolls by 157,000 jobs in December, bringing total nonfarm-payroll growth for 2004 to 2.2 million jobs.
Here’s what some economists had to say about the numbers, and what they might mean for the economy and monetary policy:
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The official unemployment rate is at its lowest level of the post-recession period. However, alternative measures of labor market utilization indicate that there are still substantial labor resources available. The economy still has room to grow quickly without straining the available labor resources.
– Steven Wood, Insight Economics
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We see nothing in this report that would discourage the Fed from continuing to return monetary policy to a neutral setting and a quarter-point rate hike on February 2nd continues to be extremely likely.
– John Ryding, Conrad DeQuadros, and Elena Volovelsky, of Bear Stearns
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Finally a monthly jobs report that contained no big surprises. … With job growth solid, overall economic growth will be well underpinned by a consumer with sufficient income to continue spending at a reasonable clip.
– Joshua Shapiro, Maria Fiorini Ramirez Inc.
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Retail employment fell by 20,000 workers, which in part reflects seasonal adjustment factors that anticipate a large rise in temporary workers. … A reversal (or gain in the payroll figures) for retail will come in February when the seasonal adjustment factors anticipate the departure of temporary workers.
– Stephen Gallagher, Societe Generale
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Payrolls were lifted by a 36,000 rebound in state and local government jobs. The weak 5,000 November rise now looks like a fluke; stronger tax revenues are financing big, sustainable gains in state and local government jobs.
– Ian Shepherdson, High Frequency Economics
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The average work week rebounded in December, contributing to an 0.4% gain in the overall hours index. For the quarter as a whole, hours rose 2.1%. With Q4 GDP tracking near 4%, this implies a 2% rise in productivity. Such an outcome would be consistent with a continuation of the underlying moderation in productivity growth that has been evident for the past few quarters.
– David Greenlaw, Morgan Stanley
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Wages rose slowly but with hours working ramping up, there was decent gain in weekly income. Workers are earning more money and that should keep consumption going. …The wage gains are modest, so bond investors should not panic that high inflation is just around the corner.
– Joel L. Naroff, Naroff Economic Advisors
WSJ online, January 7, 2005 10:17 a.m.
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