US employment picture improves

US job growth was surprisingly strong in December and pay jumped, according to a government report on Friday that may fan policy-makers' concern that a strong job market could ignite inflation.

The Labour Department said 167,000 jobs were created last month and also revised up hiring for each of the two preceding months. The unemployment rate in December was 4.5 per cent, unchanged from November.

Wall Street economists had forecast that only 100,000 new jobs would be created in December, so the report painted a picture of a healthier job market and potentially stronger expansion than anticipated as 2006 ended.