The Bureau of Labor Statistics (BLS) released the December jobs report Friday. In December, the economy added 292,000 jobs. In addition, the job total for October was revised upward from the 298,000 jobs to 307,000, and the November total was also revised from 211,000 to 252,000. With these revisions, employment gains in October and November combined were 50,000 higher than previously reported. Over the past three months, job gains returned to pre-recession levels averaging 284,000 per month. Experts anticipated 200,000 jobs.
The strong jobs report lifted the U.S. stock markets out of negative territory for the first time in 2016. The Dow, NASDAQ, and S&P all opened in positive territory although it began dropping by late morning. Prior to Friday morning, the stock market was off to one of its worst weeks in history.
Despite the high number of new jobs in December, 400,000 fewer jobs were added in 2015 than in 2014 essentially because 2014 was a recovery year. The unemployment rate remained at 5.0 percent for the third month in a row and 7.9 million persons remain unemployed. 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. Population growth kept the unemployment rate from dropping.
The unemployment rate for African-Americans declined to 8.3 percent in December. This has been cut in half from the high levels during the recession. Unemployment 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.
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. Wages showed little or no improvement in December.
In December, 1.8 million persons were marginally attached to the labor force, down by 427,000 from a year earlier. These individuals were not in the labor force but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. There were 663,000 discouraged workers in December, little changed from a year earlier. The remaining 1.2 million persons had not searched for work for reasons such as school attendance or family responsibilities.
Employment rose in several industries, including professional and business services, construction, health care, and food services and drinking places. Mining employment continued to decline due to low oil prices which led to decreased production. After adding 41,000 jobs in 2014, mining lost 129,000 jobs in 2015.
Professional and business services increased employment by 73,000 with temporary help services accounting for 34,000 of the gain. In 2015, this sector 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. Over the year, construction added 263,000 jobs, compared with a gain of 338,000 jobs in 2014.
Health care employment rose by 39,000 in December. Job growth in health care averaged 40,000 per month in 2015, compared with 26,000 per month in 2014. This is due to the fact that millions more people have insurance as a result of Obamacare and are now seeking health care services.
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. This is due to the boom in online shopping.
Manufacturing employment changed little in December, though its nondurable goods component added 14,000 jobs. In 2015, manufacturing employment was little changed adding 30,000, following strong growth of 215,000 jobs in 2014. Employment in other major industries, including wholesale trade, retail trade, financial activities, and government, changed little over the month.
The Federal Reserve began raising interest rates in December, and rates are expected to go up about three percent over the next two years. It is unclear if this will slow down job growth. The weak economy in China may also reverberate into our economy in 2016. Meanwhile, millions more Americans are now bringing home a paycheck than when Barack Obama entered the White House.