Washington, DC, United States (4E) – U.S. Federal Reserve officials said it will continue its reduction of its monetary stimulus despite a latest report showing that hiring activity by U.S. employers slowed down, with the economy adding just 74,000 jobs in December.
Last month, the unemployment rate dropped to 6.7 percent from 7 percent, according to the Labor Department report released Friday, though the decline primarily reflects job seekers leaving the labor force as they gave up their search for work.
Two top Fed officials said on Friday that another cut to bond purchases is expected this month despite the sharp drop in U.S. jobs growth in December. In December, the central bank decided to reduce its monthly bond purchases by $10bn to $75bn, citing improvements in the labor market.
The monthly job creation was the lowest in almost three years and well below the upwardly revised 241,000 positions added in November. Economists had predicted the economy to add 200,000 positions in December, with the jobless rate staying at 7.0 percent.
The weak reading were partially due to distortions as a result of bad weather.
A number of solid economic indicators in recent weeks, showing acceleration in manufacturing activity, robust gross domestic product growth and strong exports, boosted expectations that the economy had moved into a phase of more rapid growth that would translate into stronger job creation.