December Jobs Report Falls Short Of Expectations
Contrary to expectations, jobs growth in December was relatively modest.
In advance of the release of the December Jobs Report this morning, the consensus was that we would see something in the arena of 190,000 new jobs created last month, a number somewhat below what is considered ideal but still not entirely bad. Instead, the number that came in was lower than that and, in the end somewhat disappointing:
In December, the unemployment rate was 4.1 percent for the third consecutive month. The number of unemployed persons, at 6.6 million, was essentially unchanged over the month. Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 926,000, respectively. (See table A-1.)
Among the major worker groups, the unemployment rate for teenagers declined to 13.6 percent in December, offsetting an increase in November. In December, the unemployment rates for adult men (3.8 percent), adult women (3.7 percent), Whites (3.7 percent), Blacks (6.8 percent), Asians (2.5 percent), and Hispanics (4.9 percent) showed little or no change. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of new entrants decreased by 116,000 in December. New entrants are unemployed persons who never previously worked. (See table A-11.)
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.5 million in December and accounted for 22.9 percent of the unemployed. Over the year, the number of long-term unemployed declined by 354,000. (See table A-12.)
The labor force participation rate, at 62.7 percent, was unchanged over the month and over the year. The employment-population ratio was unchanged at 60.1 percent in December but was up by 0.3 percentage point over the year. (See table A-1.)
(…)
Total nonfarm payroll employment rose by 148,000 in December. Job gains occurred in health care, construction, and manufacturing. In 2017, payroll employment growth totaled 2.1 million, compared with a gain of 2.2 million in 2016. (See table B-1.)
Employment in health care increased by 31,000 in December. Employment continued to trend up in ambulatory health care services (+15,000) and hospitals (+12,000). Health care added 300,000 jobs in 2017, compared with a gain of 379,000 jobs in 2016.
Construction added 30,000 jobs in December, with most of the increase among specialty trade contractors (+24,000). In 2017, construction employment increased by 210,000, compared with a gain of 155,000 in 2016.
In December, manufacturing employment rose by 25,000, largely reflecting a gain in durable goods industries (+21,000). Manufacturing added 196,000 jobs in 2017, following little net change in 2016 (-16,000).
Employment in food services and drinking places changed little in December (+25,000). Over the year, the industry added 249,000 jobs, about in line with an increase of 276,000 in 2016.
In December, employment changed little in professional and business services (+19,000). In 2017, the industry added an average of 44,000 jobs per month, in line with its average monthly gain in 2016.
Employment in retail trade was about unchanged in December (-20,000). Within the industry, employment in general merchandise stores declined by 27,000 over the month. Retail trade employment edged down in 2017 (-67,000), after increasing by 203,000 in 2016.
Employment in other major industries, including mining, wholesale trade, transportation and warehousing, information, financial activities, and government, changed little over the month.
In addition to the numbers above, the Bureau of Labor Statistics reported that total nonfarm payroll employment for October was revised downward from +244,000 to +211,000 and that the number for November was revised upward from +228,000 to +252,000. This represents a net downward revision for the two months combined of -9,000 jobs. Combined with this month’s jobs numbers, this puts the average jobs growth for the past three months at +204,000 net jobs created per month, an improvement from where we stood a month ago but still not entirely impressive. For the year to date, we’ve seen a total of +1, 929,000 net jobs created for a monthly average of +160,750 (rounded) net jobs created per month. This is lower than the average for the year we saw last month thanks in no small part to the disappointingly low number reported for December. At the very least, this number is most certainly not one that indicates an imminent massive increase in hiring by employers. During his campaign for President, Donald Trump promised to create 25,000,000 jobs during his Presidency. That would require the creation of 3,125,000 per year over an eight-year term for an average of 261,000 new jobs per month. Over a four-year term that would require 6,250,000 per year, for an average of 521,000 new jobs per month. At the current three-month average, it would take roughly 10 years to get to Trump’s goal. At the current average for the year-to-date, it would also take nearly 13 years. And that assumes no recessions in the intervening period. It’s also worth noting that job growth for this first year of Donald Trump’s Presidency has been slower than it was during the final year of Barack Obama’s Presidency. It’s also worth noting that average jobs growth for 2017 was lower than it has been since 2010 when the economy was still shaking off the impact of the Great Recession. The final numbers for 2017 won’t be clear until we get the final revision for December in March, but at least for now it’s clear that the Trump Presidency hasn’t changed the jobs market all that significantly.
Looking deeper into the numbers, the average workweek across the board was unchanged from November at 34.5 hours while average hourly earnings rose 9 cents to $26.63. Over the year, average hourly earnings have risen by 65 cents or a relatively modest 2.5%. Additionally, while the topline U-3 unemployment rate was unchanged from last month, the long-term unemployment/underemployment number, meanwhile, increased slightly to 8.1% while both the labor force participation rate and employment/population ratio remained relatively unchanged for the month. As has been the case for the better part of the year, the biggest concern in the numbers isn’t the jobs numbers but wage growth, which remains tepid at best. This could be an indication that, at least for now, employers don’t see any reason to increase wages to either attract new labor or keep current employment from straying out into a stronger job market where they could find better-paying jobs.
In its report on the numbers, The New York Times concentrates on the disappointing wage numbers, which were sluggish throughout 2017:
Perhaps the most closely watched number in the report was the change in wages from the previous December. Year over year, earnings increased by around 2.5 percent.
“We don’t see our clients being willing to commit to wages increases on a permanent basis,” said Bill Ravenscroft, a senior vice president at Adecco Staffing USA. The agency employs around 60,000 workers, hiring more during the holiday season, and places many in distribution centers and warehouses often used by e-commerce giants.
Those companies have increased pay for workers in hot warehouse markets, such as Memphis or the Inland Empire in Southern California, where they are competing with many other companies crowded into the same area, Mr. Ravenscroft said.
But instead of increasing salaries across the board, employers are vying for pickers, packers and shippers by offering new perks. Logistics companies have begun providing on-site child care, or reimbursing employees who need to put their children in day care while they work.
Some companies are entering workers in raffles every week to win laptops, televisions and tablets, or are bringing food trucks to their warehouses and paying for employees’ lunches.
“These types of benefits in the past, you associated them with Silicon Valley, start-up companies, they weren’t synonymous with your traditional employers,” Mr. Ravenscroft said. “We aren’t seeing them saying we are going to take a long-term, universal approach to raising wages.”
There are signs beneath the surface, though, that more widespread wage growth may be around the corner. In areas where unemployment has dipped below the national rate, pay has begun to accelerate.
Cities where joblessness is 3.5 percent or lower have also witnessed an impressive 4 percent year-over-year increase in earnings, said Ian Shepherdson, chief economist of Pantheon Macroeconomics.
Bob Peterson, the chief executive of Melton Truck Lines, said he had no choice but to increase pay for his 1,600 drivers this year.
“With unemployment this low, anyone worth their salt has got a job and probably a darn good one,” Mr. Peterson said. Melton operates in 48 states and has offices in five.
Outside of the wage numbers, perhaps the most surprising item in the December report was the rather disappointing number for the retail industry. Typically, November and December see employment in this sector undergo at least a temporary increase as retailers bulk up their staffs for the holiday season. Last month, though, only saw only modest growth in that area notwithstanding what seemed as though it was a successful and busy holiday shopping season for retail. Given the fact that Thanksgiving was earlier in November than it typically is this year, it’s possible that some of the holiday-related growth in that area was covered in the November numbers. Even those numbers weren’t all that impressive, though, and overall the retail sector of the economy was rather weak compared to other sectors of the economy. In part, of course, this is likely due to the fact that more and more Americans are shopping online rather than going to bricks and mortar locations. As that continues, and as stores such as Sears continue closing locations nationwide, retail is likely to fade as a significant source of employment compared to other sectors.
In any case, Decembers numbers were rather disappointing and don’t indicate that the Trump Presidency has led to significant jobs growth as of yet. As we head into 2018 and the midterm elections, that is likely to become a political hot potato.
Dementia-Donnie was quick to claim credit for a couple strong months…in spite of, as you note above, his year long numbers being weaker than most years of Obama’s Presidency…it’ll be fun to watch him squirm on this.
…and to watch Bunge explain it to us.
This is particularly ironic given the stupid/weird video they played of him bragging about the economy at the beginning of yesterday’s press briefing.
https://www.usatoday.com/story/news/politics/onpolitics/2018/01/04/social-media-atwitter-over-trumps-video-appearance-briefing/1004621001/
Donnie probably equates the DJIA with the “economy”.
IIRC, for several years now, we’ve had a December jobs report fall below expectations, while the surrounding months were above expectations. I wonder if the seasonal weighting for December is just off now that online shopping has increasingly reduced the need for a big December retail surge.
But Donnie did win the “War on Christmas”…so he has that going for him.
https://www.brookings.edu/blog/jobs/2018/01/05/employment-growth-for-2017-ends-on-a-high-note/
@Stormy Dragon:
Yeah, but this year he just handed big corporations the biggest tax break they will have seen in decades so the average Joe on Main Street USA expects lots of jobs to become quickly available. It does not matter if the Dow goes to 30K if 90+% goes to the top 10% of earners in the country, so President Trump better hope that the employment numbers pop in January and February…oh wait, I bet the Bomb Cyclone will have an effect on hiring…so that means he will use the weather as an excuse if the job numbers are not solid in Jan/Feb.
There are plenty of GOPers who rolled their eyes when the Obama admin blamed the weather for weak numbers, and I bet some folks with scruples will do the same when the Trump admin does the same. This combined with the marginalization of Bannon is indeed a bad thing for the GOP in an election year. Weakening Bannon’s grip on the GOP means it become slightly harder for the folks at Breitbart to disseminate their message that all is great due to President Trump, which is a good thing indeed for anyone who is not already Pro President Trump.
If the only reliable GOP voters end up being President Trump’s “base” the GOP is screwed for the foreseeable future because having 35-40% of voters on your team does not a majority of voters make.
Sorry for the thread drift, but ultimately a lot of folks did not buy it when the Obama admin tried to spin bad news and quite a few folks will not buy it (certainly not a majority of the country) when President Trump’s admin goes into spin mode.
Trump is mostly boasting about the stock market right now. But that mostly benefits Wall Street (with some benefit to people who have retirement accounts). I wonder what he’s going to say when that bubble pops?
@Hal_10000:
Yeah…I’m loving my 401K but, with limited access to move that money around (twice a year in our plan), I am also very nervous about what happens when it pops.
@Hal_10000:
He’ll say Democrats didn’t clap hard enough. We’re supposed to clap real hard and say, “I do believe in dotards! I do, I do!”
The national unemployment rate was 4.1 percent. There was an unexpected loss of 20,000 retail jobs during the holiday season.
OTOH: Unemployment among black workers is at its lowest since at least the early 1970’s, when the government began tracking the data.
The black unemployment rate of 6.8 percent in December was the lowest since the Bureau of Labor Statistics started tracking it in 1972, a year in which the rate ranged from 11.2 percent to 9.4 percent. In the 45 years the data has been tracked, the unemployment rate for black or African-American workers aged 16 years and older has never fallen below 7 percent.
I know, I know. That doesn’t fit the model of identity-politics, does it libtards?
On the other hand, there’s this.
Mike
http://www.foxbusiness.com/markets/2018/01/05/six-figure-construction-jobs-are-going-unfilled.html
But they’re icky jobs I guess.
@John430: Isn’t it funny how most black people vote for “libtards”…do you think most black people are stupid or just easily manipulated? Or perhaps they can’t find any common ground with silly people who would refer to others as “libtards”…
@MBunge: Awwww….isn’t it a shame that someone whose first-year job numbers were “very, very good” is so very, very despised by so many of the American people…
@Guarneri: Well hell, with your alleged business smarts, I’m sure you could single-handedly solve this problem right away…why don’t you give the president a call, I’m sure he could find a place for you in his administration…maybe you could have Omarosa’s old office…
@Hal_10000: It’s not likely to pop. Only to stall for what may be a years-long period as Trump’s actions trash the exchange value of the U.S. dollar. Pakistan has announced it will now begin acxepting yuan for trade since His Shittiness cut financial aid to the country. Pakistan now joins Russia, Venezuela, Iran and China in explicitly moving toward abandonment of the dollar as a reserve currency, and I have no doubt others are quietly moving in that direction as Trump has threatened to cut foreign aid to any country that dared disagree with moving the American embassy to Jerusalem.
The financial press has entirely missed the dollar’s decline this year despite three interest rate hikes; all that prevented an even steeper decline was speculative frenzy over the tax cuts, and now that it’s law the dollar has given up most of what it gained over the last four months. This has major implications for American jobs, business, stocks and bonds.
Job growth is bound to slow as we reach reasonably full employment. Now we should be watching wage growth. But if wage growth picks up steam the Fed will raise rates and put an end to that nonsense. Given that they will trigger a downturn, one may only hope it happens early enough to influence the midterms.
Is the employment and job model undergoing a huge change while the economists look more at the trees instead of the forest? Think about who you talk to when you call a customer service or other support line. See “The Real Future of Work” (Politico Magazine)
And, while some states adopt higher minimum wage for mainly unskilled work, service industries and fast food restaurants are going more to automation. Watch for automated ordering in many states with high minimum wages. That next hamburger, fries, and shake might be prepared by a robot.
@An Interested Party: LOL! Libtards still believe that Latinos and African-Americans are monoliths of the Democratish Party
I use libtards in response to the creepy and oftentimes filthy name-calling used by the liberal-retards on this blog. E.g. Ben wolf in a post above references the President of The United States as “His Shittiness”. No doubt that passes as an intellectual riposte for him.
Additional gleanings from the jobs report:
Hispanic unemployment was at a near-record low of 4.9 percent in December – down from 5.7 percent the month before the election of President Trump. Additionally, there were four months in 2017 in which the Hispanic seasonal unemployment fell below 5 percent – the only time that has occurred in a single year over the past 44 years.
Asian-Americans, the demographic group that typically has the lowest unemployment rate, enjoyed a 2.5 percent unemployment rate in December – the lowest figure since 2006.
@Guarneri: Or, just a likely, the “six-figure part” of the story is fluff based on “well I know a guy who does custom heli/ox underwater welding who makes…”
Additionally, if you’d actually READ the story, you would have noted this statement:
I would guess that most of the people who have these kinds of skills already have positions that don’t require travel. Still, migrant skilled trade work may be a coming thing in the gig economy. Perhaps you should consider upgrading your skillset and cash in.
@An Interested Party:
That was really dumb, IP.
@Just ‘nutha ig’nint cracker:
I’m sorry you never had the capacity or drive to get a six figure job. It’s hard to break out from the minor leagues into the big leagues.
@inhumans99: “Bomb cyclone”: I had never heard that before this past week. We have had six straight days of single digit low temperatures and the high has not been past 32 degrees: five degrees yesterday at seven am. This is the south.
Of course this weather can affect the economy. I expect our utility bill to at least double since our heat has run almost continuously. That means a tight budget and less money for me to spend on such things like going to a movie, eating out, pay for views, a new shirt or cap, and coffee. But a lot of people have flocked to stores to get gloves, coats, boots, scarves, heavy socks, and winter caps. The ski business up in the mountains is going full steam, if you can stand the cold. The heating/ac repair people are going at it full speed. Car repair shops are out starting cars and battery sales are way up. Sales of fire logs and other related heating materials are soaring. And some lucky people just take off and head to wherever it is warm to ride it out*. So sometimes the weather is bad for some, good for others.
*To Al Gore: please contact me. I would like to rent out a room at your beach house for a week or two. Name your price.
@Tyrell: It’s more commonly called cyclogenesis or bombogenesis. You are the king of not hearing stuff so I have no doubt that this is just another thing you’ve never heard of.
https://oceanservice.noaa.gov/facts/bombogenesis.html
The rest of your post is pure bullshit. There has been no statistically significant increase in any of those sales.