U.S. job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labor market has yet to give much of a boost to workers.

    Nonfarm payrolls increased by 252,000 last month after an upwardly revised jump of 353,000 in November, the U.S. Labor Department said Friday. The jobless rate fell 0.2 percentage points to a 6-1/2-year low of 5.6 percent, but that was mainly because people left the labor force.

    The drop in labor participation and a surprise 5 U.S. cent, or 0.2 percent, decrease in average hourly earnings, which nearly erased November’s gains, took some shine off the otherwise upbeat report.

    December marked the 11th straight month of payroll increases above 200,000, the longest stretch since 1994. For last year as a whole, the economy generated 2.95 million new jobs, the strongest annual showing since 1999.

    The softness in earnings, however, is puzzling. Some economists wondered whether last month’s broad-based fall, which was led by a record 1.2 percent plunge in the retail trade sector, was a seasonal fluke that would be revised away.

    “There is no obvious fundamental economic factor that would contribute to today’s number,” said Michael Feroli, an economist at JP Morgan in New York. “We are disposed to view this decline as a one-off.”

    The drop in earnings was the biggest on record dating back to 2006. A separate, narrower gauge posted its largest percentage decline since 1983.

    The fall exacerbated a soft trend that has been in place since the 2007-2009 recession. Over the past year, earnings rose only 1.7 percent, the smallest 12-month gain since October 2012.

    While December’s earnings decline bolstered the case for the Federal Reserve to take a go-slow approach to raising interest rates, it did not remove a possible June hike from the table, economists said.

    A Reuters survey of big banks showed many economists are sticking to their June rate call.

    The Fed has kept overnight borrowing costs near zero since December 2008.

    “We have not changed our Fed call for a June tightening, but it just puts the risks later as opposed to sooner,” said Dana Saporta, a senior economist at Credit Suisse in New York.

    All sectors of the economy had employment gains last month and, in another sign of strength, 50,000 more jobs were created in October and November than previously thought.

    Overall, the data suggested the economy was positioned for strong growth this year despite troubling weakness in some economies overseas.

    Construction employment rose by 48,000, the largest gain since January, while manufacturers added 17,000 workers. Government employment increased by 12,000 positions.(SD-Agencies)