US hiring gained traction in December U.S. employment grew solidly last month, capping a strengthening trend in the nation's job market in the second half of 2011. The economy's payrolls increased by 200,000 in December, the U.S. Labor Department reported Friday. The data surpassed economists" expectations and mark a six-month stretch in which the economy generated 100,000 jobs or more in each month. The nation's jobless rate slipped to 8.5 percent from a revised 8.7 percent reading for the previous month, adding to the upbeat tone of the monthly jobs report. Expectations for a solid payrolls gain rose Thursday, when the private payrolls agency ADP said its own calculations for hiring gains were much stronger than forecast. The closely watched employment report will likely cement views that economic growth accelerated in the fourth quarter after a tepid performance in the first nine months of 2011. However, the pace of job creation remains too slow to signal a robust economic recovery is finally under way. The economy would need even faster job growth over a sustained period to make a noticeable dent in the pool of 24.4 million Americans who remain either out of work or underemployed 2-1/2 years after the end of the 2007-09 recession. With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds. Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years. The employment report will offer little comfort to the Obama administration and could provide Republicans with more ammunition to attack the government's handling of the economy. President Barack Obama's chances of a second term in office could depend on the health of the labor market. Although the pace of job creation remains mediocre, there is no denying that the market is healing. Small business hiring is improving and layoffs have subsided, with first-time applications for state unemployment benefits hovering near 3-1/2 year lows. Over the past several months, the government has consistently revised up earlier payroll counts based on its survey of employers. In addition, the household survey, from which the unemployment rate is derived, has shown an even more vigorous pace of hiring for each of the last four months.