Friday’s release of the Employment Situation Summary by the Department of Labor’s Bureau of Labor Statistics (BLS) contained positive news with the economy adding 252,000 net non-farm payroll jobs during the month of December while the unemployment rate dropped to 5.6 percent. However, in a negative turn, hourly wages dropped dramatically by five cents an hour on average, erasing most of the six cent an hour gain posted in November.
Job numbers from the previous two months were revised upwards. October’s net job gains were revised upward by 18,000 to a total of 261,000. Meanwhile, November’s job numbers were revised upward by 32,000 to a total of 353,000.
December was the 58th consecutive month of net private sector job growth. Over the past 58 months there have been a total of approximately 11.2 million net jobs gained within the private sector. According to Council of Economic Advisers (CEA) chairman Jason Furman in his White House blog on Friday, with almost 3 million jobs added, 2014 had greater job growth than in any other year since 1999.
During the month, private businesses gained an approximate total of 240,000 jobs while the government sector added 12,000 jobs. The greatest gains were in the professional and business services, construction, leisure and hospitality and the private healthcare and social assistance sectors. Manufacturing also continued its fairly steady recovery by adding 17,000 jobs. In the government sector the federal, state and local sub-sectors all posted net job gains.
Following is an approximate breakdown of net job growth within the major private industry sectors and the government sector for December:
- Construction: +48,000
- Financial Activities: +10,000
- Education and Health Services: +48,000
- Information: +2,000
- Leisure and Hospitality: +36,000
- Manufacturing: +17,000
- Mining and Logging: +2,000
- Other Services: +2,000
- Professional and Business Services: +52,000
- Retail Trade: +7,700
- Transportation and Warehousing: +3,100
- Utilities: +1,900
- Wholesale Trade: +10,000
- Government: +12,000
The average work week for private sector non-farm jobs did not change in December, remaining at 34.6 hours. At 41.0 hours the manufacturing sector average work week dropped slightly by 0.1 hours. As stated previously, average hourly wages for all non-farm private sector employees dropped significantly by 5 cents to $24.57. Hourly wages increased on average by 1.7 percent in 2014. According to Chairman Furman, though December’s inflation data has not yet been determined, even with December’s lower wages it is expected that wages for the year will have outpaced inflation, the second straight year of such an occurrence.
Many of the other reported indicators all showed mixed results to little change in December, though most had significant improvement over the past year:
- For the month the number of long-term unemployed changed little, remaining at 2.8 million; over the past year this number has declined by almost 1.1 million, down by 28.2 percent.
- The number of involuntary part-time workers changed little for the month, remaining at 6.8 million; over the past year this number has declined by 976,000, down by 12.6 percent.
- The civilian labor force participation rate edged downward by 0.2 percentage point to 62.7 percent for the month. Compared to December 2013 this rate has dropped by 0.1 percentage point, though it has fluctuated between 62.7 percent and 62.9 percent since April 2014.
- The employment to population ratio remained flat in December at 59.2 percent. Over the past year this number has risen by 0.6 percentage point.
- The number of marginally attached workers dropped slightly compared with Dec. 2013 to 2.3 million, a 6.9 percent drop. Within the marginally attached segment, the number discouraged workers dropped by 177,000 to 740,000, a 19.3 percent drop.
In his blog on Friday, CEA chairman Furman remarked on the latest labor news from the BLS,
“Today’s solid employment report caps off a strong year for the U.S. labor market, which achieved a number of important milestones in 2014. Total job growth last year was the strongest since 1999, while the unemployment rate fell at the fastest pace in three decades. Although nominal wages fell in December, inflation-adjusted wages have generally been rising, and job growth has picked up in sectors that traditionally provide good, middle-class jobs. This week, the President has been laying out his vision to build on this progress by increasing access to community college, supporting the recovery in the housing sector and investing in U.S. manufacturing. On top of these steps, the President looks forward to working with Congress and taking action on his own authority to invest in America’s infrastructure, close tax loopholes and encourage job creation in America, support working families, expand overseas markets for American goods and services, make common-sense reforms to the immigration system, and raise the minimum wage.”
The “January 2015 Employment Situation Summary” is scheduled to be released by the BLS on Friday, Feb. 6, 2015.