December Jobs Soar by 292K, Smash Expectations But Average Wages Post First Drop Since 2014
As we noted in the jobs preview, only a super strong number had any chance of prompting a market reaction, and sure enough, the just announced December print of +292,000 smashed expectations of +200K, surging from last month's upward revised 252K, while October was revised to a massive 307,000, a net addition of 50K over the last two months.
So time for another rate hike, right?
Not so fast: as usual, the fly in the ointment was a well-familiar one: wages simply did not grow, and with Wall Street expecting a 0.2% increase in average hourly wages, in December not only was there no wage growth, but in fact, average hourly earnings posted a tiny decline from $25.25 to $25.24.
From the report:
The number of unemployed persons, at 7.9 million, was essentially unchanged in December, and the unemployment rate was 5.0 percent for the third month in a row. Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 800,000, respectively. (See table A-1.)
Among the major worker groups, the unemployment rate for blacks declined to 8.3 percent in December, while the rates for adult men (4.7 percent), adult women (4.4 percent), teenagers (16.1 percent), whites (4.5 percent), Asians (4.0 percent), and Hispanics (6.3 percent) showed little or no change. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially 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. (See table A-12.)
The civilian labor force participation rate, at 62.6 percent, was little changed in December and has shown little movement in recent months. In December, the employment- population ratio, at 59.5 percent, changed little. (See table A-1.)
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Total nonfarm payroll employment increased by 292,000 in December. Employment rose in several industries, including professional and business services, construction, health care, and food services and drinking places. Mining employment continued to decline. In 2015, payroll employment growth totaled 2.7 million, compared with 3.1 million in 2014. (See table B-1.)
Employment in professional and business services increased by 73,000 in December, with temporary help services accounting for 34,000 of the gain. In 2015, professional and business services added 605,000 jobs, compared with a gain of 704,000 in 2014.
Construction showed strong job growth for the third consecutive month, gaining 45,000 jobs in December. Job gains occurred among specialty trade contractors (+29,000) and in construction of buildings (+10,000). Over the year, construction added 263,000 jobs, compared with a gain of 338,000 jobs in 2014.
In December, health care employment rose by 39,000, with most of the increase occurring in ambulatory health care services (+23,000) and hospitals (+12,000). Job growth in health care averaged 40,000 per month in 2015, compared with 26,000 per month in 2014.
Food services and drinking places added 37,000 jobs in December. In 2015, the industry added 357,000 jobs.
Employment in transportation and warehousing rose by 23,000 in December, with a gain of 15,000 in couriers and messengers.
Within the information industry, motion pictures and sound recording added 15,000 jobs in December, offsetting a decline of 13,000 in the prior month.
Employment in mining continued to decline in December (-8,000). After adding 41,000 jobs in 2014, mining lost 129,000 jobs in 2015, with most of the loss in support activities for mining.
Manufacturing employment changed little in December, though its nondurable goods component added 14,000 jobs. In 2015, manufacturing employment was little changed (+30,000), following strong growth in 2014 (+215,000).
Employment in other major industries, including wholesale trade, retail trade, financial activities, and government, changed little over the month.
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, and 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. (See tables B-2 and B-7.)
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