Nonfarm employment rose by 167,000 in December; unemployment unchanged

Nonfarm employment increased by 167,000 in December,while the unemployment rate remained unchanged at 4.5 percent,according to Bureau of Labor Statistics. Average weekly wages rose 0.5 percent to $577.66. Hourly earnings for the year were up 4.5 percent.

Jobs grew the most in eight months, according to Bloomberg News, adding that this shows that the economy is weathering the slump in housing and manufacturing. The increase was higher than the 100,000-job median estimate of 70 analysts surveyed by Bloomberg. Economists surveyed by Dow Jones expected a 115,000-job increase and for hourly earnings to rise 0.3 percent. The yield on the benchmark 10-year Treasury note jumped 7 basis points to 4.67 percent following the report, Bloomberg said.

In its story, Reuters said, "some parts of the report may be troubling to Federal Reserve policy-makers who have expressed concern about potential inflation." The increase in average hourly earnings was the highest since April, Reuters said.

If jobs are healthy and wages are going up, why are consumers so worried? Many retailers reported disappointing holiday sales. Housing prices, with the exception of places like New York City, are soft.