Friday, January 6, 2017
The Bureau of Labor Statistics (BLS) has released its monthly non-farm payroll report - the final one of President Obama's tenure - and results are again a bit lower than expected. 156K new jobs (non-farm-related) were created in the month of December, and the unemployment rate rose 10 basis points to 4.7%.
The previous two months were revised in opposite directions: October 2016 slid from an initial read of 142K jobs to 135K, while November totals swung way up, from 178K originally reported to 204K today. Year over year, non-farm jobs gains fell roughly 100K. A total of 2.2 million new jobs were created in full-year 2016, down half a million from the 2.7 million created in 2015.
Healthcare brought in 43K new jobs, whereas Social Assistance employment grew +20K. Food and Drinking establishments hired 30K more people. We see employment declines in Mining, Construction and Information Services. Long-term unemployment remains unchanged at 1.8 million, and the labor force participation rate is also roughly the same as a month ago at 62.7%.
Average hourly earnings ticked up higher than expected, by 0.4%, following a disappointing drop of 0.1% in the November report. Analysts had been expecting pay rates to grow from historically low levels for many months now, and only sometimes do they get it. In December, they did.
Looking at total employment data over the past few years, aside from a few anomalies (such as May 2016's paltry 38K new jobs), we're seeing a gradual slowdown in new jobs creation. Many analysts had predicted this would happen once the unemployment rate (U3) fell below 5%, and here we are. If this trend continues, we should see sub-150K new jobs in the coming months.
However, with a President Trump taking over the White House two weeks from today, and his rallying cry of bringing more manufacturing and construction jobs to the U.S., we may see a new trend emerging. It's unclear that, even if his most aggressive jobs-producing initiatives are passed by Congress right away, we will see results manifest in near-term BLS reports.
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