Published: Tue, January 14, 2020
Economy | By

Latest U.S. jobs report shows resilience of job market

Latest U.S. jobs report shows resilience of job market

The U.S. economy added a solid 145,000 new jobs in December and the unemployment rate remained at a 50-year low, according to data released Friday by the Department of Labor Statistics. The recent proliferation of low-wage jobs has left a bleak outlook when it comes to the country's overall employment situation, as December's jobs report showed the "weakest wage growth since July 2018", according to Washington Post economics correspondent Heather Long. This marks the largest employment loss in the sector since January 2016, when almost 17,000 jobs were eliminated.

Construction, an industry that has added about 2,200 jobs since 2015, is expected to lead the way in 2020, anchored by such big projects as the construction of a new plant for Maple Leaf Foods, already underway, as well as the high demand for housing.

The number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, was unchanged in December and accounted for 20.5% of the unemployed. Fed policy moved to neutral after the final October rate cut and the bank's year end economic projections have rates on hold through the end of 2020.

Average hourly earnings for employees on private, nonfarm payrolls rose 3 cents to $28.32.

In December, retailers added 41,200 jobs, the largest monthly increase since January 2017. That number was 57.6 per cent in December, improved from November's 57.3 per cent.

That said, the growth in the number of jobs in the province did not keep pace with the growth of the provincial labour force over the last 12 months, which explains the increase in the unemployment rate. Graph 1 highlights that while total job "openings" in the US economy, expressed as both a level and a rate, remain quite elevated, they have been easing off a bit over the past couple of years.

"With these revisions, employment gains in October and November together were 14,000 lower than previously reported", the report said.

Employment fell in manufacturing and transportation and warehousing.

One bright spot was the U-6, or underemployment rate, which fell to 6.7%, a record low in data back to 1994. Since April, the United States saw 7 consecutive months of labor force growth, with over 1.9 million Americans joining the labor market, and unemployment still declined. It was unclear if the president still felt the same way after Friday's lackluster jobs report.

However, given the negative trend in job numbers and GDP growth towards the end of the previous year, it's also too early to sound the all clear, he cautioned.

December has not been the best month for payrolls over the last decade.

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