WHOA! Job creation surges in December

The U.S. economy closed out 2015 with a huge round of job creation.

Nonfarm payrolls grew by 292,000 during December, according to a Bureau of Labor Statistics report Friday that showed employment momentum as the year wound down. The unemployment rate was 5 percent. A separate, more encompassing measure that accounts for those who did not look for work in the past month or were working part time for economic reasons — the underemployed — head steady as well, at 9.9 percent.

Economists had been expecting 200,000 new positions and the unemployment rate to hold steady. Stock market futures temporarily jumped after the report, with Wall Street bidding Friday to halt the worst market start in history. Government bond yields edged higher, with the benchmark 10-year note yielding about 2.18 percent.

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The one disappointment from the report came in wages, which actually fell slightly. Average hourly earnings declined 1 cent, translating to an annualized gain of 2.5 percent. Economists had been expecting a gain of 0.2 percent monthly and 2.8 percent annualized.

The reason for the weak wage data could be because job creation was greatest in professional and business services, which added 73,000, 34,000 of which were temporary positions likely added in conjunction with holiday hiring. The average work week was unchanged at 34.5 hours.

"In some ways we can say it looked good from the outside, but beneath the surface problems remain — not the least of which is the lack of strong wage growth," Mark Hamrick, senior economic analyst at Bankrate.com, said in a statement. "If we keep getting strong hiring, wage gains should accelerate."

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Other sectors adding jobs included construction (45,000), health care (39,000), restaurants and bars (37,000) and transportation and warehousing (23,000). Mining continued its losing streak, with 8,000 gone in December to end a year in which the sector saw 129,000 jobs go away.

"Before we get too carried away, however, it's worth stressing that the record warm temperatures in the fourth quarter, and December in particular, probably paid a role," Paul Ashworth, chief U.S. economist at Capital Economics, said in a note. "It's notable that construction employment increased by a massive 45,000 last month and more than 120,000 in the fourth quarter."

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Job growth comes as the economy is struggling in other areas.

Recent reports have shown a clear contraction in manufacturing as well as a sharp decline in exports. Corporate profits are in a recession as well, with the fourth-quarter earnings season expected to show an annualized drop of about 5 percent. Economists also have been writing down their expectations for fourth-quarter GDP growth: They now range from the Atlanta Fed's 1.0 percent to a CNBC survey showing 1.7 percent.

The Fed watches the monthly jobs report closely as it embarks on the normalization of monetary policy. The U.S. central bank in December approved its first rate increase in more than nine years. CME futures traders put the chance of another hike in March at 52 percent.

The numbers bring an end to a year that saw payroll growth decline from 3.1 million in 2014 to 2.7 million in 2015.

Previous months saw substantial upward revisions. The October number went from 298,000 to 307,000, while November's gain was pushed from 211,000 to 252,000.

The closely watched labor force participation rate, which has remained mired at lows not seen since the late 1970s, edged higher to 62.6 percent. The number of workers considered out of the labor force declined 277,000 to 94.1 million,the lowest since August but still representing a 17 percent gain since December 2008.