The unemployment rate in December again held at its lowest level in 7-1/2 years. Net job growth was among the strongest for 2015 and far exceeded analysts’ estimates.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 275,000 nonfarm job gains in December. Local, state and federal governments netted 17,000, resulting in 292,000 total net job gains. Analysts had expected only around 200,000 total net job gains, according to various sources.
The unemployment rate held at 5.0 percent in December, for the third month in a row. That’s the lowest rate since April 2008 when it was 5.0 percent, but beginning to rapidly rise toward the recessionary high of 10.0 set in October 2009.
The private sector has now gained nonfarm jobs for 70 consecutive months since the Great Recession. The unemployment rate has dropped 5.0 percentage points from the 2009 recessionary high.
The BLS also revised job gains for October and November, showing that the economy netted 50,000 more jobs than the BLS had previously estimated for the two months. After those revisions, net job gains totaled 2.7 million in 2015. Job gains have now averaged 284,000 per month in the past three months.
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The professional and technical services industry added 73,000 jobs in December, with temporary help services (“temp workers”) accounting for 34,000 of those. The industry as a whole gained 605,000 jobs in 2015, for a monthly average of 50,417.
Job growth continued in health care with 39,000 job gains in December, which was just below the monthly average of 40,000 jobs in 2015. Much of the industry’s steady job growth over the past few years, even throughout the Great Recession, is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.
At 37,000, job growth also continued in the food services and drinking places industry. The industry added 357,000 jobs in 2015. The monthly average was 29,750.
Manufacturing, an industry that economists consider to be a gauge of labor-market health, netted 8,000 jobs in December, bringing the total net job gains to only 30,000 for the entire year. Construction, also a measure of labor-market health, gained 45,000 jobs in December and a total of 263,000 in the year. (See Table B by the BLS for more job numbers listed by industry.)
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (16.1 percent) followed by blacks (8.3), Hispanics (6.3), adult men (4.7), whites (4.5), adult women (4.4) and Asians (4.0, not seasonally adjusted). Only blacks experienced a significant change in their unemployment rate, which dropped from 9.4 percent in November.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.5 percent unemployment rate in December, which has been the the same since last June. Those in the same age group and who don’t have high school diplomas suffered a much-higher 6.7 percent rate, down from 6.8 in November and 7.4 percent in October. (See Table A-5 by the BLS for more information about the unemployment rate by education level.)
The unemployment rate dropped 0.7 percentage points over 2015, from 5.7 to 5.0. Economists consider an unemployment rate of 5.0-5.5 percent to be normal and a sign of a healthy economy.
The number of workers that the BLS counted as unemployed was 7.9 million in December, the same as in September, October and November. The number of unemployed workers has decreased by 800,000 in the past 12 months.
The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours.
The number of involuntarily part-timers in December was 6.0 million. That number dropped by 764,000 in 2015.
The average workweek for all part-timers and full-timers in the private sector was unchanged at 34.5 hours in December. Their average hourly earnings dropped by 1 cent to $25.24, after an increase of 5 cents in November. Average hourly earnings rose by 2.5 percent in 2015. Average hourly earnings increased by 2 cents to $21.22 in December, for private-sector production and nonsupervisory employees.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs — at least not for them.
The number of marginally-attached workers in December was 1.8 million, up slightly from 1.7 million in November. Among the marginally-attached, 663,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. The number of discouraged workers was up from the 594,000 that the BLS initially reported for November. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been without jobs for 27 weeks or longer, was 2.1 million in December, the same as in September, October and November. These workers accounted for 26.3 percent of the unemployed in December. Standard state unemployment benefits last only up to 26 weeks without extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
For more details about the December unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the January 2016 unemployment rate and job numbers on February 5. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Except where otherwise noted, figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.