In the final month of 2016, U.S. total jobs rose by +156,000, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS).
While the +156,000 figure was pretty good, although not outstanding, it should also be noted that November was revised upward from a previously reported +178,000 to +204,000. The extra 26,000 jobs is a welcome bonus.
The average monthly employment increase in 2016 was +180,000, which was a significant slowing from +229,000 in 2015. More important, however, 2016 marked the sixth year in a row of annual job gains exceeding two million. The best year in that period (i.e., 2011 to 2016) was 2014, when the annual climb in jobs was +3.0 million.
In the two years of the Great Recession, 2008 and 2009, there were annual job losses of -3.6 million and -5.1 million respectively.
The national unemployment rate in December 2016 moved a little higher to 4.7% from 4.6% in November but was lower than the 5.0% figure 12 months earlier in December 2015.
The annual average ‘official’ unemployment rate (U-3 from Table A-15 of the report) in 2016 was 4.9%, a nice improvement on 2015’s 5.3%.
The U-6 measure of unemployment, which is a much broader measure of who is disappointed in their job prospects, retreated to 9.2% from 9.3% the month before. In December 2015, U-6 had been 9.9%.
Construction did not fare particularly well in the latest labor market statistics. The total number of jobs in the sector fell by 3,000, although ‘residential specialty contractors’ added 12,000 positions to their payrolls.
The year-over-year growth rate of construction employment, which has long been exceeding the all jobs pace, reaching a high of +6.1% in December 2014, settled back to only +1.5% in the latest month. It just so happens that +1.5% was also the rate of gain for all jobs year over year, with services-providing work performing better at +2.0%.
The real shock for construction, though, came in average weekly earnings. They were only +0.6% year over year for all on-site workers and +0.7% for on-site non-supervisory personnel. The comparable percentage changes for all workers in the economy were +2.3% and +1.9%.
(The earnings numbers are seasonally adjusted, but that doesn’t mean they capture every nuance. The early onset of cold winter weather in much of the country in December undoubtedly cut into the number of hours worked in construction.)
With respect to average hourly earnings, construction’s results were considerably more favorable. The all jobs increase, including bosses, was +2.9%, with construction at +3.0%.
Excluding bosses, the all jobs average hourly earnings jump was +2.5% year over year. Construction did better at +3.3%.
As an interesting sidebar, while women currently account for 49.6% of all employees in the economy, their share of the construction workforce is only 12.6%. That’s lowest among all industrial sectors, with ‘mining and logging’ coming next, at 14.7%. The representation of women is strongest in ‘education and health services’, 77.0%.
Furthermore, the 12.6% share of jobs in construction filled by women has exhibited little variability since at least 2000. The relevant table in the report is B-5.
Manufacturing registered a good hiring gain in December, +17,000 jobs. Among subcategories, the makers of ‘fabricated metal products’ added most to their staffing (+6,000 jobs).
The jobless rate in manufacturing, at 4.0% in December of last year, was the same as 12 months previously in December 2015. President-elect Trump has shown an early inclination to use his powers of persuasion to convince owners in the manufacturing sector to reverse decisions about the offshoring of work.
U.S. manufacturing employment in December of last year was -45,000 jobs in nominal terms and -0.4% year over year.
Two subsectors were tied for the greatest year-over-year percentage increase in employment in December 2016, ‘professional and business services’ and ‘education and health services’ (both +2.6%). The former was led by ‘computer systems design services’, +4.1% year over year, and by ‘accounting and bookkeeping services’, +3.6%.
It should be noted, though, that ‘accounting and bookkeeping services’ suffered a substantial nominal jobs loss (-13,000 jobs) in the most recent period.
In the ‘education and health services’ field (+70,000 jobs in December), the bulk of the new work was in ‘ambulatory health care services’ (+30,000 at the offices of doctors, dentists and other health practitioners) and with ‘hospitals’ (+11,000).
‘Accommodation and food services’ employment skyrocketed by +35,000 jobs in December 2016. Owners and managers of ‘food services and drinking places’ (+30,000 jobs) were particularly on the look-out for new hires.
The unemployment rate in the ‘leisure and hospitality’ sector is almost always outsized compared with the all-economy labor market. The sector is also characterized by a high frequency of personnel shifts. Nevertheless, the jobless level in ‘leisure and hospitality’ has now tightened to 6.4%, down from 7.1% in November 2016 and 7.4% in December 2015.
‘Retail trade’ employment was +1.6% year over year in December 2016. In seasonally adjusted nominal terms, the sector added 6,000 jobs in the final month of last year.
Already in 2017, some major store chains (e.g., Macy’s and Sears) have announced they will be shuttering outlets. It appears rationalization in the ‘bricks and mortar’ shopping space still has a ways to go.
While not being a huge source of employment, it’s still interesting to note that the number of jobs with ‘courier and messenger’ services increased by a fast +4.9% year over year in December.
Employment with ‘temporary help services’ took a rare nosedive in the latest month, -16,000 in nominal terms.
Finally, government added 12,000 jobs in December. The net jobs increase at the federal level (+5,000) was almost entirely offset by a reduction at the state level (-4,000), but local jurisdictions (+11,000) fished the labor pool with enthusiasm.