Employment Growth Surges Above 300,000 to Close Out the Year
Unemployment Moves to Higher Rate of 3.9 Percent
JOB GROWTH: The pace of job growth in the final month of 2018 nearly hit a record for the year at 312,000. Following upward revision of the previous two months’ numbers, which yielded an additional 58,000 jobs, the average monthly gain over the past three months was a healthy 254,000.
TOP INDUSTRIES: The top sectors for growth in December included healthcare, hospitality, construction, manufacturing and retail.
UNEMPLOYMENT: After holding steady for three months at a record low rate, the unemployment rate inched up by 0.2 percentage point to 3.9 percent in December. Although higher unemployment is typically a negative, in this case, it is actually a sign of greater optimism as more people chose to leave the sidelines to look for work. Until they find employment, however, they will swell the overall size of the labor pool but not the numbers of employed workers.
WAGES: Hourly earnings trended up again, moving the average annual rate up to 3.2 percent.
WORK WEEK: The average work week increased by 0.1 hour to 34.5 hours in December.
TEMPORARY JOB TRENDS: The temporary jobs sector experienced its sixth consecutive month of growth, adding 10,300 jobs in December. Year-over-year growth in this sector increased from 2.1 percent in 2017 to 3.2 percent in 2018, edging the temp penetration rate to its highest level ever at 2.0609 percent.
WHAT DOES IT ALL MEAN? December brought surprisingly good news and lots of cheer, despite warnings by those sure they see brake lights ahead. Job growth far exceeded expectations and wages were up as well. Those are unquestionably strong indicators of business optimism and solid growth. Although January could tell a different story, for right now, the outlook is bright. The far-off storm clouds that could threaten all this good news? A global economic slowdown and rising interest rates on the horizon could put a damper on this optimistic picture for 2019. What has not slowed down at all is the mounting challenge of an ever-tightening talent supply chain, as employers continue to struggle to fill jobs to support growth.
This newsletter references the BLS Report of December activity, released 1/4/19.
Sources: U.S. Bureau of Labor Statistics (BLS), Steinberg Employment Research, CNBC, Staffing Industry Analysts, Bloomberg, The Wall Street Journal, The New York Times, USA Today, Associated Press, Reuters, FOX Business, MarketWatch, MSNBC