NEW YORK (CNNMoney.com) -- Employers added more workers in December, as a government report Friday showed a labor market that was much stronger than forecasts.
The report showed a net gain of 167,000 jobs on U.S. payrolls in December, up from the 154,000 increase in November, which was also revised higher. Economists surveyed by Briefing.com had forecast only a 100,000 rise in payrolls in December.
The unemployment rate stayed at 4.5 percent, in line with economists' forecasts.
Wages also came in higher than expected, as the average hourly wage was up 8 cents, or 0.5 percent, to $17.04. Economists had forecast only a 0.3 percent increase in wages. The November wage gain was also revised higher.
The wage gain left the average hourly wage up 4.2 percent from a year earlier. That's well above the pace of inflation, which rose only 2 percent in the 12 months ended in November, according to a separate government reading.
Bond prices took a sharp dive on the report, raising yield on the closely watched 10-year note 4.66 percent from 4.59 percent before the report, as the report raised new inflation concerns and hit hopes that the Federal Reserve might soon cut interest rates.
Stock futures rebounded slightly but were still pointed to a lower open for stocks.
"Stock traders basically got a little bit of good news on employment front since they were worried about weakness, but they'll be concerned about the wages," said Anthony Chan, chief economist for JPMorgan Private Client Services. "It's a small positive."
Skilled worker shortage curbing growth 
