Something remains very broken with the US labor market: while the unemployment rate remains just shy of the lowest print since August 2007, rising fractionally to 4.7%, wage growth for most workers, as reported earlier, rose just 2.5%, far below the 4.0% it was when the unemployment rate last hit 4.7%.
This continues to vex economists who have vowed that if only one lowers the unemployment rate far enough, all the slack in the labor market will be soaked up. Alas, that is not happening, for several reasons, the chief of which is that the quality of jobs added remains subpar, with wage growth – especially for less than “supervisory” and management positions – flat.
Still, according to the BLS at least, some 155,000 seasonally adjusted jobs were added in December, arbitrarily goalseeked as they may have been. Where were they? Here is the answer:
- The most actively hiring sector was health care, which saw a whopping 70,000 increase in December jobs, nearly half of total. Most of the increase occured in ambulatory health care services (+30,000) and hospitals (+11,000). Social assistance added 20,000 jobs in December, reflecting job growth in individual and family services (+21,000).
- Professional and Busines Services rose by a total of 30,500, the second highest gaining category. here the biggest contributor was Administrative and Waste Services to Buildings and Dwellings, which rose by 10,600.
- Another minimum wage job category that added jobs in December was
Leisure and Hospitality, which added a grand total of 24,000 jobs. here, the biggest contributor was an old favorite: employment in food services and drinking places, which continued to trend up in December (+30,000).
- What is curious is that while retailers have been laying off thousands of people left and right, according to the BLS this category added another 6,300 in December, if a substantial drop from November’s 19,500.
- Highly paid construction jobs declined by 3,000 in December after posting a substantial rebound of 17,000 in November
- Just as troubling was the ongoing decline in Information jobs, which declined by 6,000 in December, after dropping double that amount in November
- Also concerning was the sharp drop in Temp Help services: a harbinger of pent up labor demand, this category tumbled by 15,500 in December, the biggest monthly decline in years.
- There was some good news for higher paying wages in December: Employment edged up in manufacturing (+17,000), with a gain of 15,000 in the durable goods component.
- Employment in the highly paid financial activities also continued on an upward trend in December (+13,000).
- Finally, government added an additional 12,000 jobs.
The visual summary is below: