Job candidates are processed during a job fair at the Amazon fulfillment center in Robbinsville Township, New Jersey, in August. (AP Photo/Julio Cortez, File)

Job candidates are processed during a job fair at the Amazon fulfillment center in Robbinsville Township, New Jersey, in August. (AP Photo/Julio Cortez, File)

US ends strong year with a gain of 148,000 jobs in December

The unemployment rate for blacks is at the lowest level since 1972.

By Jim Puzzanghera / Los Angeles Times

WASHINGTON — The U.S. labor market ended a year of solid growth on a disappointing note in December, but economists said tax cuts are set to breathe some new life into the gradually decelerating employment recovery.

December’s gain of 148,000 net new jobs, reported Friday by the Labor Department, was down sharply from an upwardly revised 252,000 net new jobs added in November.

December’s job creation was enough to push 2017’s total over 2 million for the seventh straight year, although the figure was down slightly from 2016. The only other time the U.S. added more than 2 million jobs annually for such a long stretch was during the internet-fueled boom of the 1990s.

Despite the December slowdown, job creation averaged 204,000 over the final three months of 2017. That was the best quarterly pace since mid-2016.

The unemployment rate remained at 4.1 percent for the third straight month. That is the lowest since the end of 2000.

The unemployment rate for blacks, at 6.8 percent, was higher than for the overall population but down more than a percentage point over the year to the lowest level since the Labor Department began tracking it in 1972.

The rate for blacks dropped from a high of 16.8 percent in early 2010. The unemployment rate for Latinos matched a post-1972 low of 4.8 percent in November, but rose to 4.9 percent last month. It had been 13 percent in 2009.

The relative decrease in the rates for blacks and Latinos matches that of the overall unemployment rate, which fell from a recent high of 10 percent in late 2009.

The overall unemployment rate held steady in December because the workforce grew only modestly, by 64,000. The percentage of working-age people in the labor force remained at 62.7 percent last month, near a four-decade low.

Average hourly earnings rose 9 cents to $26.63 in December after just a three-cent rise in November. Wages were up 2.5 percent in 2017, about the same annual gain as the previous two years.

Gary Cohn, the top economic adviser to President Donald Trump, said Friday that he wanted monthly job growth of more than 200,000. The corporate and individual tax cuts that took effect Monday will help push hiring back up to that level this year and spur higher worker pay, he said on Bloomberg TV.

“We see the economy continuously growing and continuously adding jobs, and remember tax reform is now five days old and the input that that’s going to have into the economy is … just barely starting to have an effect,” Cohn said. “We are committed to real wage growth and we do believe you’ll see it over the course of the next year or two.”

Job growth has been trending down since 2014, indicating the nation is nearing full employment as the recovery from the 2007-09 recession is more than eight years old.

Overall in 2017, the economy added 2.06 million net new jobs. That was down from 2.24 million in 2016 and well off the nearly 3 million jobs added in 2014.

A continued decline in the retail sector, which eliminated 20,000 jobs in December and 67,000 for the year, was a key factor in the slowing growth last month. Brick-and-mortar retailers are struggling in the face of increased online shopping, economists said.

Retail losses were offset by solid gains in health care, construction and manufacturing last month, the Labor Department said.

Still, the labor market right now is “about as good as it gets,” said Mark Zandi, chief economist at Moody’s Analytics.

“It’s not picture perfect, but it’s a pretty picture,” he said. “I think that business’ No. 1 problem is already finding qualified workers and that problem is going to intensify as the year progresses.”

The 2017 job growth was largely an extension of the economic policies enacted under former President Barack Obama, Zandi said.

It takes months for a new president to have an effect on the economy. Aside from some regulatory reductions, Trump did not put any major economic policies in place until the tax cut legislation at the end of last year, said Zandi, who was an adviser to Sen. John McCain’s 2008 presidential campaign.

“2017 was very much an Obama economy. 2018 will be Trump’s economy,” Zandi said. “Going forward it’s his. He owns it.”

Zandi predicted that the economy would add 2 million jobs again in 2018. A significant number of those — about 325,000 — will be fueled by the tax cuts, he said.

And those corporate and individual cuts will help push annual wage growth above 3 percent by the end of this year, Zandi said.

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