U.S. nonfarm payrolls unexpectedly decline in December

The U.S. Labor Department announced on Friday that nonfarm payrolls fell by 140,000 in December after an upwardly revised 336,000 advance in the prior month (originally a gain of 245,000), reflecting the recent surge in coronavirus cases and efforts to contain the pandemic. This was the first decline in employment since the U.S. job market started to recover in May.

According to the report, employment declines in leisure and hospitality (-498,000 jobs), private education (-63,000), and government (-45,000) were partially offset by gains in professional and business services (+161,000), retail trade (+121,000), construction (+51,000), and transportation and warehousing (+47,000). The unemployment rate stood at 6.7 percent in December, unchanged from November.

Economists had forecast the nonfarm payrolls to increase by 71,000 and the jobless rate to edge up to 6.8 percent.

The labor force participation rate remained unchanged at 61.5 percent, while hourly earnings for private-sector workers rose 0.8 percent m-o-m (or $0.23) to $ $29.81, following an unrevised 0.3 percent m-o-m advance in November. Economists had forecast the average hourly earnings to increase 0.2 percent m-o-m in December. Over the year, average hourly earnings surged by 5.1 percent in December, following an unrevised 4.4 percent rise in November.

The average workweek decreased by 0.1 hour to 34.7 hours in December, being below economists' forecast for 34.8 hours.