ECONOMIC REPORTJob growth accelerates to 167,000 in DecemberAverage hourly earnings jump 5%; jobless rate remains at 5%PrintE-mailDisable live quotesRSSDigg itDusBy Rex Nutting, MarketWatchLast Update: 4:10 PM ET Jan 5, 2007WASHINGTON (MarketWatch) -- Job growth in the US unexpectedly accelerated in December, with nonfarm payrolls rising by 167,000 and the jobless rate remaining at a very low 5%, the Labor Department reported FJob growth was much stronger than the 100,000 expected, dashing fleeting hopes held by some that the Federal Reserve would cut interest rates "The underlying recovery remains intact," wrote Steven Wieting, an economist for Citigroup Global Markets, in a note to "We continue to believe that monetary policy is on hold for the foreseeable future," Joshua Shapiro, chief economist for MFR I, wrote in an email following the "solid " Bonds and stocks sold off on the The odds of a rate cut in the first half of the year fell to 52% from 86% before the data, according to the Chicago Board of Trade's federal funds See Market S Job growth in the previous two months was revised higher by a total of 29, Economists had expected job growth to slow from November's upwardly revised 154,000, especially after Wednesday's ADP employment report, which showed a 40,000 decline in private-sector See Economic C Joel Prakken, president of Macroeconomic Advisers, which computes the ADP index, was unapologetic about the big discrepancy between the ADP and government numbers, saying he wouldn't be surprised if the government's data were revised "We aren't trying to forecast the initial estimate," Prakken said, "we are trying to get it " The government said Friday that payrolls grew by 84 million in 2006, an average of 153,000 per Revisions to be published next month will likely increase that total Growth averaged 136,000 a month in the final quarter of the Fed researchers have said the economy needs to add about 100,000 jobs per month to absorb new entrants into the workforce and maintain a steady unemployment With strong job growth in 2006, the jobless rate fell from 9% at the beginning of the year to 5% Read the full Average hourly earnings jumped by 8 cents, or 5%, far ahead of the 3% rise Over the past 12 months, average hourly earnings have increased 2%, more than double the inflation rate and the fastest growth since late With productivity slowing, the acceleration in earnings will keep Fed officials focused on inflationary pressures in the tight labor On the other hand, faster wage growth should also support consumer spending, keeping growth on December's job growth came in strong despite losses in three key sectors: Construction, manufacturing and Construction jobs fell by 3,000 after seasonal Residential construction jobs fell by 16,000, but those losses were partially offset by gains in nonresidential Manufacturing jobs dropped by 12,000 in December, the sixth consecutive In the past year, factory jobs have fallen by 72, The losses in December were concentrated in autos, primary metals and Of 84 manufacturing industries, 6% were adding jobs in D "This is terrible news," said Peter Schiff, president of Euro Pacific C "The problems of the US economy are just getting We destroyed 12,000 goods-producing " Retail firms cut 9,000 jobs after seasonal Retail jobs fell by 58,000 in Jobs were added in most every other Of 278 industries, 6% were adding jobs in D Job growth was strong in professional services, which added 50,000 workers in December and 420,000 in all of Health care added 31,000 jobs in December and 324,000 in the Employment in food services increased by 23,000 in December and 304,000 for the In the separate survey of households, the government reported employment gains of 303,000 in December and an increase in unemployment of 23,000 to 85 In 2006, the household survey indicated job growth of 14 The labor-force participation rate (the percentage of adults working or looking for work) rose to 4% from 3% The employment-population ratio (the percentage of adults working) rose to 4% from 2% That's the highest employment rate since September Rex Nutting is Washington bureau chief of MarketW