In its regular report of the previous month’s job situation Friday, the U.S. Bureau of Labor Statistics estimated Friday that 292,000 seasonally adjusted new jobs were added to the economy in December, 275,000 in the private sector and 17,000 in government. The consensus of experts surveyed by Bloomberg ahead of the report said the BLS estimate would be that 200,000 new jobs had been created.
Given the strength of the report, it’s probable that the Federal Open Market Committee will raise interest rates again when it meets in March.
The estimate makes December the 69th month in a row for private job growth, the 63rd in a row in which new public jobs have been added. The official unemployment rate—the so-called “headline” rate that the BLS labels U3—remained unchanged at 5.0 percent. The number of people officially unemployed remained unchanged at 7.9 million.
The BLS also revised its previous count of new jobs created in November from 211,000 to 252,000. The October count was revised from 298,000 to 307,000.
The civilian workforce rose 466,000, after having risen by 273,000 in November and 216,000 in October. The employment-population ratio climbed to 59.5 percent, and the labor force participation rate edged up slightly to 62.6 percent.
While the recovery has strengthened the job market over the past five-and-a-half years, wages have been very slow to respond. And that was true again in December. Wages for all employees on private nonfarm payrolls fell by 1 cent an hour in December to $25.24 after rising 5 cents an hour in November. Private-sector production and nonsupervisory employees saw their paychecks rise 2 cents an hour to $21.22.
Elise Gould at the Economic Policy Institute wrote Thursday:
The one indicator that hasn’t really improved over the year [...] is nominal wage growth [wages unadjusted for inflation]. Nominal wage growth has been consistently below target over the last six years, and 2015 was no exception. The cumulative cost of slow wage growth is mounting. Nominal wages will be the key indicator to watch in 2016. As the labor market continues to improve, more people will find employment and the rolls of missing workers (those who have been sidelined in the weak economy) should shrink. Eventually, a healthier labor market should translate into faster wage growth. The question is when will workers start seeing the decent economic news reflected in their paychecks?
Besides the “headline” unemployment U3 rate, the BLS makes an estimate that includes both unemployment and underemployment called U6. This tallies people with no job, part-time workers who want a full-time job but can't find one, and a portion of the nation’s "discouraged" workers. U6 was unchanged in December at 9.9 percent.
The BLS warns those who scrutinize its statistics that the bureau’s "confidence level" each month is plus or minus 105,000 jobs. That means the "real" number of new jobs created in December was not 292,000 but rather fell into a range between 187,000 and 397,000.
Each month, the bureau also measures the job situation of Americans aged 25-54, people said to be in their "prime working years." The employment-population ratio for this cohort reached a high point of 81.9 percent in April 2000. By December 2007, when the Great Recession got underway, that ratio had fallen to 79.7 percent. It hit the bottom at 74.8 percent in November 2010. The rate has been slowly rising ever since. It rose to 77.4 percent in November, its best showing since December 2008, and remained at that level in December.
Key aspects of the report:
Hours & Wages
• Average hourly earnings of private-sector production and nonsupervisory employees rose by 2 cents to $21.22 in December.
• Average work week for all employees on non-farm payrolls remained unchanged at 34.5 hours in December.
• Average hourly earnings for all employees on private non-farm payrolls fell 1 cent to $25.24
• The manufacturing workweek fell 0.1 hour to 40.6 hours.
• The average workweek for production and nonsupervisory employees on private non-farm payrolls remained at 33.7 hours.
Duration of unemployment in December
• Less than five weeks: 2.405 million, down from 2.406 million in November
• 5 to 14 weeks: 2.192 million, down from 2.262 million in November
• 15 to 26 weeks: 1.235 million, down from 1.270 million in November
• 27 weeks and more: 2.085 up from 2.050 million in November
Job gains and losses in November for selected categories:
• Professional services: + 73,000
• Transportation & warehousing : + 23,100
• Leisure & hospitality: + 29,000
• Information: + 16,000
• Health care & social assistance: + 52,600
• Retail trade: + 4,300
• Construction: + 45,000
• Manufacturing: + 8,000
• Mining and Logging: - 8,000
Here's what the seasonally adjusted job growth numbers have looked like in December for the previous 10 years.
December 2005: + 158,000
December 2006: + 172,000
December 2007: + 97,000
December 2008: - 696,000
December 2009: - 283,000
December 2010: + 89,000
December 2011: + 226,000
December 2012: + 293,000
December 2013: + 109,000
December 2014: + 329,000
December 2015: + 292,000