The final jobs report of 2014 was released by the Bureau of Labor Statistics (BLS) today and 252,000 jobs were added and the unemployment rate dropped to 5.6 percent—the lowest since June of 2008. The number of jobs and the unemployment rate beat expectations. 2014 was the best year for job creation since the end of the last millennium.
The number of unemployed persons dropped last month by 383,000 to 8.7 million. Over the year, the unemployment rate and the number of unemployed persons declined by 1.7 million or 1.1 percent. In 2014, job growth averaged 246,000 per month, compared with an average monthly gain of 194,000 in 2013.
The BLS revised the October and November job totals upward. The employment number for October was revised from 243,000 previously reported to 261,000, and November was revised from 321,000 to 353,000. With these revisions, employment gains in October and November were 50,000 higher than previously reported.
Most of the new jobs were added by the private sector, but the public sector added 12 thousand workers, including the federal government which has been shedding jobs since the austerity program began in 2011. The largest gains were by state governments who are hiring again due to higher tax revenue as a result of the stronger economy.
While the report shows that strong job grow is continuing, there are some disappointing factors. One is that the number of long-term unemployed remains unchanged at 2.8 million or 31.9 percent of the unemployed. This means that the beneficiaries of the job growth are people who are new to the job market, like recent graduates, or people who were only unemployed for a short while.
The other bad news is that average hourly earnings for all employees on private payrolls decreased by 5 cents to $24.57, wiping out the increase of 6 cents in November. Over the year, average hourly earnings have risen by only 1.7 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees decreased by 6 cents to $20.68. During that period, CEO pay increased by a much higher rate.
ADP, which surveys private sector employment, reported that 241,000 private sector jobs were added last month, in line with the BLS numbers.
Employment in professional and business services rose by 52,000 in December. Monthly job gains in the industry averaged 61,000 in 2014. The jobs often go to college graduates.
The construction industry added 48,000 jobs in December, well above the employment gains in recent months. Employment also increased in heavy and civil engineering construction and in nonresidential building which added 22,000 jobs.
In December, employment in food services and drinking places increased by 44,000. The industry added an average of 30,000 jobs per month in 2014.
The health care industry continued to hire, adding 34,000 jobs in December largely because more people are now insured. Employment growth in health care averaged 26,000 per month in 2014 and 17,000 per month in 2013, totally debunking continuing Republican claims that Obamacare is killing healthcare jobs.
In December, manufacturing employment increased by 17,000, with durable goods accounting for most of the gain. Manufacturing added an average of 16,000 jobs per month in 2014, compared with an average gain of 7,000 jobs per month in 2013. Manufacturing had been on a decline for decades due to out sourcing.
Employment in wholesale trade and in financial activities continued to trend up in December. Retail trade changed little in December, following a large gain in November in anticipation of the holidays. Employment in other major industries, including mining and logging, transportation and warehousing, information, and government, changed little in December.
Senate majority Leader Mitch McConnell gave all the credit for the job gains to Republicans even though the new majority had not taken office until this month, and has enacted no jobs bills.
Clearly what needs to be addressed now are wages. Far too much money is flowing to the top and the benefits of the economic growth are not being distributed. This will spell trouble over the mid and long term because consumers will continue to lose buying power. This will eventually hurt our consumer-based economy.
Congress could help this by increasing the minimum wage and reforming the tax code which gives breaks to billionaires at the expense of the middle class, and passing an infrastructure bill to create higher paying jobs. Republicans are not likely to do any of those things.
Meanwhile, party like it is 1999.
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