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Job Growth Still Rolling But At A Slower Pace In December

The employment market cooled off slightly in December as employers added 148,000 new jobs, according to the U.S. Bureau of Labor Statistics Employment Situation Report issued January 5. For all of 2017, the economy added about 2.1 million jobs – an average of about 175,000 jobs per month (Exhibit 1).

Construction workersDuring each of the previous two months, employers added more than 200,000 jobs. But while the pace of growth slowed in December, the unemployment rate remained unchanged at just 4.1% -- the lowest level since December 2000 (Exhibit 2).  It also marked the 87th consecutive month of employment gains.

For all of 2017, the unemployment rate was down by 0.6% and the number of unemployed persons fell by 926,000.

Exhibit 1Wages also continued to edge up, with a $0.09 increase over the previous month, from $26.54 to $26.63. Over all of 2017, average hourly earnings rose by $0.65, or 2.5% (Exhibit 3).

Initial jobless claims have remained at an extremely low level, with 250,000 claims filed the week ending December 30, according to the Department of Labor Unemployment Insurance Weekly Claims report. The 4-week moving average was 241,750, an increase from the previous month’s level of 238,250.  The recent jobs claims average has been at the lowest level since April 7, 1973 (Exhibit 4).

Exhibit 2The advance number for seasonally adjusted insured unemployment during the week ending December 23 was 1,914,000, a slight increase from a month earlier of 1,908,000. The insured unemployment average over the past few months has been in a range lower than at any period since 1973.  This is even more impressive considering that the size of the labor force is much larger today than it was 45 years ago.

Jobless claims have remained under 300,000 for 148 consecutive weeks – the longest stretch since 1970.

Here are some of the other key trends highlighted in the report: 

  • Exhibit 3The number of long-term unemployed (those jobless for 27 weeks or more) dipped slightly from 1.6 to 1.5 million, and accounted for 22.9% of the unemployed – a 0.9% drop from the previous month. For all of 2017, the number of long-term unemployed declined by 354,000 (Exhibit 5).
  • The number of persons employed part time for economic reasons inched up to 4.9 million in December, but was down by 639,000 for all of 2017 (Exhibit 6).
  • The average workweek for all employees on private nonfarm Exhibit 4payrolls was unchanged for the month at 34.5 hours (Exhibit 7).
  • The labor force participation rate of 62.7% was unchanged for the month and for all of 2017. The employment-population ratio, at 60.1%, was unchanged for the month and up 0.3% for the year.
  • The labor force participation rate for those in their prime working years (age 25-54) was at 81.8% in December, an increase of 0.4% from a year earlier. That is about 1.2% below the pre-recession level,1 and continues to be a weakness in the employment recovery (Exhibit 8).

Exhibit 5Economic expansion and corporate growth trends indicate that the employment market should continue to expand in the months ahead. But low wages and slow wage growth continue to be an issue.  However, if job growth continues, we could see an increase in the rate of wage growth in 2018.

  Exhibit 6 Exhibit 7  Exhibit 8                      

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