December jobs report shows rising unemployment, unexpected job growth
- The U.S. Labor Market saw an increase in employment in December, closing the year with the addition of 312,000 total nonfarm payroll jobs, according to the U.S. Bureau of Labor Statistics' monthly jobs report. The growth occurred in health care (+50,000), food services and drinking places (+41,000), construction (+38,000), manufacturing (+32,000) and retail trade (+24,000).
- The unemployment rate rose from its sustained 49-year low of 3.7% to 3.9% in December, and the number of unemployed people increased by 276,000 to 6.3 million, the report said.
- Among the unemployed, the number of job leavers — unemployed people who immediately look for new work upon departure — increased by 142,000 in December to 839,000. The number of long-term unemployed remained at 1.3 million, comprising 20.5% of the total unemployed, according to the bureau.
Last November was the third straight month with a 3.7% unemployment rate — the lowest in almost 50 years. For employers, low unemployment is synonymous with a halt in the creation of new roles and the challenge to acquire new talent suited for existing roles. Though those headaches persists, experts think the slight rise in December's unemployment rate could be due to the 11-cent increase in the average hourly wage, which may have flooded new applicants into the job market, according to The New York Times.
Last month, stakeholders also predicted that job growth had reached its peak with November's addition of 155,000 jobs (revised now to 176,000) marking the start of growth slow. Instead, the market saw a substantial addition of jobs in December.
"Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war," Mark Zandi, chief economist at Moody's, said in a press statement last Thursday. "Favorable December weather also helped lift the job market."
Much of this surprising uptick in new jobs has come from medium-sized businesses, according to ADP's National Employment Report for December. Around 48% of its total reported 271,000 new jobs originated with medium-sized businesses, while around 32% came from small employers and 20% came from large employers. This pattern of growth echoes what ADP reported in November — though 92,000 more jobs were created in December in total.
Despite talk of an impending recession in 2020 that might put employers on edge, some economists have said the December jobs report indicates economic strength in the U.S. — at least in the U.S. labor market.
"Employment is a lagging economic indicator, and December saw significant evidence of a global economic slowdown," Ball State University Professor of Economics Michael Hicks wrote in an email to press. "This jobs report will signal to the Federal Reserve that continued monetary tightening is appropriate, and that the U.S. labor market remains a bright spot in an otherwise troubled economic environment."
Correction: A previous version of this article gave an incorrect figure for the percentage of total job growth in December. HR Dive regrets the error.
- The New York Times U.S. Added 312,000 Jobs in December; Unemployment at 3.9%