STORY: U.S. job growth unexpectedly blew past expectations in December while the unemployment rate fell, as the labor market ended the year on a solid footing.

A report from the U.S. Labor Department said the economy added 256,000 jobs last month, which was above the highest estimate in a Reuters poll of economists and the most since March.

Meanwhile, the unemployment rate fell to 4.1% from 4.2%.

The report 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 results reinforced the predominant view that the Federal Reserve would keep interest rates unchanged this month.

It also supported the U.S. central bank's cautious stance toward further rate cuts this year amid mounting fears that campaign promises made by President-elect Donald Trump could stoke inflation, including plans to impose or massively raise tariffs on imports and his pledge to deport millions of undocumented immigrants.

Job gains last month were concentrated in non-cyclical industries like healthcare, which added 46,000 positions that were spread across home healthcare services, nursing and residential care facilities as well as hospitals.

And retail employment rebounded by 43,000 jobs after declining 29,000 in November.