The U.S. economy added a disappointing 148,000 jobs in December while the unemployment rate held at 4.1 percent, according to a Labor Department report Friday.

Economists surveyed by Reuters had been expecting nonfarm payrolls to grow by 190,000. The total was well below the November pace of 252,000, which was revised up from the initially reported 228,000.

Average hourly earnings rose modestly to the same 2.5 percent annualized gain as in November.

Biggest gains came from health care (31,000), construction (30,000) and manufacturing (25,000). Bars and restaurants added 25,000, while professional and business services grew by 19,000.

An alternative measure of unemployment that counts discouraged workers and those working part-time for economic reasons edged higher to 8.1 percent. That came amid an unchanged labor force participation rate at 62.7 percent and a steady employment-to-population level of 60.1 percent, tied for the lowest since May.

The household survey, which calls homes to ask how many are at work, rose even less than the establishment survey, with 104,000 more Americans reported on the job.

The closely watched report comes amid buoyant expectations for growth overall. GDP rose 3.2 percent in the third quarter and 3.1 percent in the second quarter, and the Atlanta Fed projects the third quarter to register another 3.2 percent gain.

In addition, most retailers reported sharply higher holiday sales. Mastercard estimated growth at 4.9 percent for the 2017 holiday season compared to the same period a year ago.

Federal Reserve policymakers are watching the jobs data closely, both for payroll gains and for average hourly earnings. Though central bank economists estimate the jobs market is near full employment, wage pressures have remained muted.

Markets expect the Fed to announce another quarter-point hike in its benchmark interest rate target. The probability for a hike stood at 68 percent heading into the jobs report and was unchanged immediately after the release.

The pace of job growth comes from the same month that Congress passed landmark tax legislation that took down the corporate rate from 35 percent to 21 percent and lowered rates for many Americans.

No less an authority than Warren Buffett is urging optimism, penning a column for Time magazine that cites the U.S. “game of economic miracles” that is only in its “early innings.”

The jobs report follows a stronger-than-expected reading on private-sector employment. The private sector added 250,000 jobs in December, well above the 190,000 jobs expected by economists polled by Reuters.

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Source: cnbc economy
Job creation whiffs in December; payrolls up 148,000, unemployment still 4.1%