December Jobs Post Solid Gain
Total nonfarm payroll employment rose by a better-than-expected 292,000 in December, with the unemployment rate unchanged at 5.0 percent, the Bureau of Labor Statistics reported Friday.
BLS revised numbers in October was revised from +298,000 to +307,000 revised November from +211,000 to +252,000. With these revisions, employment gains in October and November combined came in 50,000 higher than previously reported. Over the past three months, job gains averaged 284,000 per month.
John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said while December job gains were stronger than expected and supports continued economic growth, wages did not meet expectations, hinting that seasonal factors overstated the strength of the labor market.
“Warm weather may have boosted the overall number–construction employment rose 45,000–but seasonal issues from holiday hiring looked more muted,” Silvia said. “There appears to be a structural shift in the consumer spending and wages series that reinforces our view that average hourly earnings are a lagging indicator of the labor market and growth.”
The report said the number of unemployed persons, at 7.9 million, was essentially unchanged in December; the unemployment rate held at 5.0 percent for the third month in a row. Over the past 12 months, the unemployment rate and the number of unemployed persons fell by 0.6 percent and 800,000, respectively.
The number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 2.1 million in December and accounted for 26.3 percent of the unemployed. The number of long-term unemployed has shown little movement since June, but was down by 687,000 over the year.
The civilian labor force participation rate, at 62.6 percent, was unchanged in December and has shown little movement in recent months. The employment-population ratio, at 59.5 percent, also was unchanged.
BLS said the average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in December. The manufacturing workweek edged down by 0.1 hour to 40.6 hours, while factory overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.
The report said average hourly earnings for all employees on private nonfarm payrolls, at $25.24, changed by -1 cent, following an increase of 5 cents in November. Over the year, average hourly earnings rose by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees, at $21.22, changed by +2 cents).
“Job gains are set to continue at a more moderate pace than the past two years as the expansion matures, although they should still remain strong enough to lower the unemployment rate on trend and put pressure on labor costs as labor force growth remains weak,” Silvia said.
