What employers need to know about the December jobs report
The economy capped the year—and the decade—with steady, slowing job growth, with the latest release of the U.S. Bureau of Labor Statistics’ monthly jobs report. According to the December jobs report, the labor market added 145,000 jobs in December. Meanwhile, the unemployment rate held at 3.5% and average hourly earnings increased by 3 cents, totaling $28.32. Here are the headlines from December’s report.
1. A Decade of Job Gains
Following a surprisingly robust November, the BLS report continued to lead with job gains, albeit at a slower pace. According to the report, 145,000 jobs were created in December, which was shy of Wall Street estimates of about 160,000. “Sluggish growth and uncertainty abroad, combined with a maturing labor market at home, contributed to slimmer payroll gains last year,” Gregory Daco, the chief United States economist at Oxford Economics, told the New York Times.
Revisions to the two previous job reports revealed there were 14,000 fewer job gains than originally reported. After these revisions, job gains have averaged 176,000 over 2019, compared to the 223,000 monthly average in 2018. The Wall Street Journal says, “A cooler pace of hiring reflected employers’ difficulty finding enough workers, global economic uncertainty and the fading effects of 2018’s tax cuts.”
In total, roughly 2.11 million jobs were created this past year, marking 2019 as the 11th consecutive year of job growth. In 80 years of data, this marks the longest stretch of economic expansion.
2. Employment Gains and Losses
The BLS report showed that hiring favored the service sectors last month, with retailers leading the pack. Retailers added 41,000 jobs in December, with the biggest gains in clothing and accessories stores and building material and garden supply stores, which had both shown declines a month prior. Goldman Sachs says this expansion in retail can largely be contributed to a late Thanksgiving that counted many seasonal workers in December’s report. Overall, employment in retail trade changed little in recent years, with gains of about 9,000 in 2019 and 14,000 in 2018.
In addition, hotels and restaurants increased staff by 40,000, the health care industry created jobs for 28,000 workers, and construction companies grew by 20,000 jobs. Professional and business services (+10,000) grew as well, but at a slower pace compared to last year. Employment fell in mining (-8,000), transportation and warehousing (-10,000), and manufacturing (-12,000).
3. Unemployment Rate Remains at Half-Century Lows
The unemployment rate closed the decade at 3.5% for the third month in 2019 when the rate matched the lowest reading since 1969. According to the BLS report, the jobless rate was at 3.9 percent last year with 6.3 unemployed workers, compared to 5.8 million unemployed persons in December 2019. Goldman says that low unemployment may have prompted some companies to minimize traditional year-end layoffs in light of worker shortages.
Meanwhile, MarketWatch reports that the U6, a broader measure of unemployment that accounts for workers who are on part-time pay for purely economic reasons, fell to 6.7%, the lowest level on record. The labor force participation rate held steady at 63.2% last month.
4. Pay Day Affects Wage Growth
Wages continued to increase in December, up just 3 cents, for an average hourly earnings total of $28.32. Wage growth dipped from 3.1% to 2.9% for the year, despite a consistently low unemployment rate. While economists were predicting a higher jump in wages, the Wall Street Journal says a “calendar quirk” restricted gains. “This December the 12th of the month, the date on which the wage survey is based, and the 15th, a common payday, didn’t fall in the same week—something that often leads to artificially depressed wage growth calculations.” The Fed cut interest rates three times last year, but plans to hold the rate steady for now, depending on economic developments play out.
The next jobs report will be released on February 7, 2020, at 8:30 a.m. EST. In the meantime, sign up for Monster hiring solutions for free to see how Monster can help drive job growth at your organization.