The Bureau of Labor Statistics
reported Friday that, for the 11th consecutive month, more than 200,000 new jobs were created in December, easily making 2014 the best job growth year since the economy began expanding in summer 2009. Seasonally adjusted, the economy added 240,000 new private-sector jobs in December. In the public sector, 12,000 new jobs were created, for a total of 252,000.
We've now had 58 months of private sector job growth and 51 months of overall job growth. That latter figure is shorter by seven months because of the devastating layoffs of hundreds of thousands of public-sector workers that occurred at the federal, state and local levels.
The number was close to the consensus of experts surveyed by Bloomberg earlier in the week that estimated the economy had created 245,000 new jobs in December.
While the report overall was strong, there was one glaring problem. Hourly wages fell slightly. They have not kept up with inflation in 2014.
Revisions in the BLS report for December raised previously calculated new jobs in October from 243,000 to 261,000 and in November from 321,000 to 353,000. For all of 2014, 2.952 million new jobs were created, the best year since 1999.
The employment-population ratio remained unchanged at 59.2 percent. The labor force participation rate fell to 62.7 percent. That's equal to the rate in September 2014, but the last time it was lower than that was in October 1977. The LFPR peaked at 67.2 percent in April 2000. The civilian labor force fell 273,000 in December.
The bureau says the economy now has 1.85 million more jobs than there were at the pre-recession peak.
The official "headline" unemployment rate called U3 in BLS jargon, fell to 5.6 percent, the lowest since June 2008. U6—a BLS measure of unemployment and underemployment that includes people with no job at all, part-time workers who want full-time jobs but can't find one, and many "discouraged" workers—fell 0.2 percent to 11.2 percent in December, having fallen 0.1 percent in November.
The BLS warns readers that its calculation of "the monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 90,000." That means the "real" number of new jobs created in December wasn't 245,000, but somewhere in a range between 155,000 and 335,000.
By the bureau's count, 8.7 million people were officially out of work in December. Millions of workers who have left the workforce because they have given up on finding a job are not included in that count.
For more details about today's jobs report, please continue reading below the fold.
The BLS doesn't distinguish between full-time and part-time jobs in its headline numbers. Most recent hiring has been for full-time jobs. Only about one-third of those are high-wage positions, however, fewer in that category than before the recession. Middle-wage positions are still lagging. What that means is that,
on average, people who have found new jobs are being paid less than for the ones they lost in the Great Recession.
The number of people counted as "part time for economic reasons" in December decreased to 6.8 million. These workers want full-time jobs but have only been able to find part-time positions or have had their full-time hours reduced.
Some key elements in the report:
Hours & Wages
• The average hourly earnings of private-sector production and nonsupervisory employees fell 6 cents to $20.68. In January of 2014, that average was $20.39. That's a 1.5 percent rise for the year. But when the 1.6 percent inflation rate is figured in, it's clear the average worker lost ground last year.
• Average work week for all employees on non-farm payrolls was unchanged at 34.6 hours.
•Average hourly earnings for all employees on private non-farm payrolls fell 5 cents to $24.57
Real (inflation-adjusted) wages did not make a significant gain in 2014. That's a byproduct both of the acute crisis brought on by the worst downturn since the 1930s and the chronic "stagnant" wages problem that has afflicted the lower economic tiers for nearly four decades.
• The manufacturing workweek fell to 41.0 hours, and factory overtime rose by 0.1 hour to 3.6 hours.
• The average workweek for production and nonsupervisory employees on private nonfarm payrolls rose to 33.9 hours.
Among other news in the December job report:
Demographic breakdown of official (U3) seasonally adjusted jobless rate:
• African American: 10.4 percent
• Latino: 6.5 percent
• Asian (not seasonally adjusted): 4.2 percent
• American Indian (data not collected on monthly basis)
• White: 4.8 percent
• Adult women (20 and older): 5.0 percent
• Adult Men (20 and older): 5.3 percent
• Teenagers (16-19): 16.8 percent
Duration of unemployment:
• Less than five weeks: 2.375 million
• 5 to 14 weeks: 2.293 million
• 15 to 26 weeks: 1.274 million
• 27 weeks and more: 2.785 million
Job gains and losses in selected categories:
• Professional services: + 52,000
• Transportation & warehousing : + 3,100
• Leisure & hospitality: + 36,000
• Information: + 2,000
• Health care: + 43,700
• Retail trade: + 7,700
• Construction: + 48,000
• Manufacturing: + 17,000
Here's what the seasonally adjusted job growth numbers have looked like in December for the previous 10 years.
December 2004: + 129,000
December 2005: + 159,000
December 2006: + 171,000
December 2007: + 97,000
December 2008: - 697,000
December 2009: - 283,000
December 2010: + 71,000
December 2011: + 196,000
December 2012: + 214,000
December 2013: + 84,000
December 2014: + 252,000
••• •••
The BLS jobs report is the product of a pair of surveys, one of more than 410,000 business establishments called Current Employment Statistics, and one called the Current Population Survey, which questions 60,000 householders each month. Here is the BLS's explanation of its methodology. The establishment survey determines how many new jobs were added. It is always calculated on a seasonally adjusted basis determined by a frequently tweaked formula. The BLS report only provides a snapshot of what's happening at a single point in time.
It's important to understand that the jobs-created-last-month-numbers that it reports are not "real." Not because of a conspiracy, but because statisticians apply formulas to the raw data, estimate the number of jobs created by the "birth" and "death" of businesses, and use other filters to fine-tune the numbers. And, always good to remember, in the fine print, they tell us, with a 90 percent confidence level, that the actual number of newly created jobs reported each falls within a plus or minus 90,000 range.