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  Nonfarm Payrolls Rose 145,000 in December
Posted Under: Data Watch • Employment

 

Implications:  The job market keeps chugging along.  Nonfarm payrolls increased 145,000 in December, slightly slower than the consensus expected 160,000.  However, civilian employment, an alternative measure of jobs that includes small-business start-ups, grew 267,000.  In the past year, these two measures of jobs have been very close, on average, with payrolls up 176,000 per month while civilian employment has grown 165,000 per month.  Look for faster job growth in the next few months as the government ramps up temporary hiring for the once-in-a-decade Census.  The unemployment rate remained at 3.5% in December, but the U-6 measure of unemployment, which includes discouraged workers and part-timers seeking full-time jobs, fell to 6.7%, a record low (data go back to 1994), even lower than at the peak of the first internet boom in 2000.  The weakest part of today's report is that average hourly earnings grew only 0.1% in December and are up 2.9% from a year ago, which is slower than the 3.3% gain the twelve months ending in December 2018.  However, wage gains are still beating inflation and we expect the tight labor market to generate a re-acceleration of wage growth in 2020.  Even with the recent slowdown in the growth of average hourly earnings, total earnings by all private-sector workers combined are up 3.8% in the past year, which is enough to keep pushing consumer spending higher.  Notably, labor force participation among "prime-age" workers (25-54) hit 82.9% in December, the highest level since 2009.  Overall, the report bolsters the case that the Federal Reserve will not cut short-term interest rates in 2020.  Look for another healthy year for the labor market, with the jobless rate dropping to 3.2% by year end, the lowest since the Korean War.   

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Posted on Friday, January 10, 2020 @ 11:54 AM • Post Link Share: 
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