The December employment report on Friday was a modest disappointment with fewer new jobs and slowing wage gains. But the report is an exception to other strong recent labor data, and the big picture is that the longest hiring expansion in 80 years is lifting lower-income workers in particular as accumulating evidence shows.

The jobless rate remained steady at 3.5% as labor participation held at its recent high of 63.2%. The 145,000 new jobs are fewer than the 184,000 average monthly gains over the last three months and the...