Nonfarm payrolls increase 256,000 in December
Unemployment rate drops to 4.1 from 4.2
Fewer permanent job losers; duration of unemployment falls
Average hourly earnings rise 0.3; up 3.9 yearonyear

WASHINGTON, Jan 10 Reuters U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1 as the labor market ended the year on a solid footing, reinforcing views that the Federal Reserve would keep interest rates unchanged this month.

The Labor Department39;s closely watched employment report on Friday also showed a decline last month in the number of people who have permanently lost their jobs and a shortening in the median duration of unemployment. A rise in these measures had raised concerns about labor market deterioration.

The upbeat report also supported the U.S. central bank39;s cautious stance toward further monetary policy easing this year amid mounting fears that pledges by Presidentelect Donald Trump to impose or massively raise tariffs on imports and deport millions of undocumented immigrants could stoke inflation.

Those worries were evident in minutes of the Fed39;s Dec. 1718 policy meeting published on Wednesday, which noted most participants remarked that … the Committee could take a careful approach in considering further cuts.

The odds have increased that the Fed is close to being finished with its loosening cycle, particularly if the incoming Trump administration pushes ahead with a stagflationary mix of tariffs and…