Employers in the United States added 216,000 workers to their payrolls in December, the Department of Labor said Friday.
The unemployment rate was unchanged from 3.7 percent in the prior month.
Economists had expected the economy to add 170,000 after payrolls were reported as increasing by 199,0000 in November and 150.000 in October. The November figure was revised down to 173,000 and the October figure was revised down to 105,000. That totals to 71,000 fewer jobs.
In September, employers grew their payrolls by 262,000. In August, payrolls rose by 227,000.
The unemployment rate was expected to tick up to 3.8 percent.
Private payrolls grew by a strong 164,000, a big increase from 136,000 in November and just 44,000 in October. Government employment grew by 52,000, led by hiring in state and local government.
The slowdown in hiring has bolstered market expectations that the Fed is done raising rates and will begin cutting in the first half of next year. The Fed decided at its meetings in December, November, and September to hold rates steady to see how earlier rate increases are affecting the economy. The last time the Fed raised interest rates was in July.
The market now expects the Fed to cut rates at its March meeting and to cut four more times through the end of the year, for a total of five cuts. The Fed has eight meetings scheduled for this year, beginning with one at the end of January.
The Federal Reserve has been trying to cool off demand for labor, fearing that higher wages could put upward pressure on inflation. In recent months, those efforts have appeared to pay off as job openings have fallen and payroll growth slowed.
Inflation has fallen sharply, although it remains significantly above the Fed’s two percent target. The latest figures from the Department of Commerce show the personal consumption price index rose 2.6 percent in the 12 months through November, with core prices rising 3.2 percent.
Initial jobless claims fell last week by 18,000 to 202,000, fewer than expected. Claims can be volatile around holidays. Continuing claims fell 31,000 to 1,855,000.
Payroll processor ADP, which produces an independent measure of private sector hiring, said Thursday that companies added 164,000 workers in December. The expectation was for 115,000 jobs. ADP said the private sector added 103,000 jobs in November.
