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You are Here: Home > Blog > Unemployment Rate – December 2016

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Unemployment Rate – December 2016

Friday, January 6th, 2017

Although job gains came in somewhat below economists’ expectations in Obama’s last full month as president, employers created a record number of jobs under his two terms as president. Wage growth reached a seven-year high in December.

According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 144,000 nonfarm job gains in December. Local, state and federal governments gained 12,000 jobs, resulting in 156,000 total net job gains. Economists had expected around 175,000-180,000 total job gains, according to various sources.

The BLS revised job gains for October and November 2016, showing that the economy netted 19,000 more jobs than the BLS had previously estimated. After that revision, job gains averaged 165,000 per month over the past three months. Throughout 2016 job gains averaged 180,000 per month, for a total of 2.16 million. They averaged 229,000 per month in 2015.

The unemployment rate edged up from 4.6 to 4.7 percent in December. Even so, it was still the lowest rate since since July 2007 (before the Great Recession), except for May 2016. It was 4.7 percent in both months.

Average hourly earnings for all private-sector employees increased by 10 cents to $26.00 in December, after decreasing by 2 cents in November. Average hourly earnings rose by 2.9 percent in 2016, the most in seven years. For private-sector production and nonsupervisory employees, average hourly earnings increased by 7 cents to $21.80, after increasing by 2 cents in November.

The private sector has now gained nonfarm jobs for 81 consecutive months since the Great Recession, the longest streak of job gains since 1939. The economy created 11.3 million jobs under Obama’s two terms, after losing up to 800,000 per month before he took office. The unemployment rate has dropped 5.3 percentage points from the recessionary high of 10.0 set in October 2009. (More information about the unemployment rate is below.)

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At 43,000, job growth continued in health care as it has for years, even throughout the Great Recession. (For example, the industry averaged 39,000 job gains per month in 2015 and 35,000 in 2016.) Much of the industry’s steady job growth over the past few years 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.

Food services and drinking places netted 30,000 job gains in December, for a total of 247,000 in 2016.

Manufacturing, one of the standard measures of labor-market health, gained 15,000 jobs. Construction, also a measure of labor-market health, lost 3,000 jobs, likely mostly due to winter weather. As of last month, the industry had gained 59,000 jobs in three months, mostly in residential construction. (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 (14.7 percent) followed by Blacks (7.8), Hispanics (5.9), adult men (4.4), adult women (4.3), Whites (4.3) and Asians (2.6, not seasonally adjusted). No group experienced a significant change in their unemployment rate except for teenagers, who saw a decrease of 0.5 percent.

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, up from 2.3 percent in November. Those in the same age group and who don’t have high school diplomas suffered a much higher 7.9 percent rate, the same as in November. (See Table A-5 by the BLS for more information about the unemployment rate by education level.)

Economists consider an unemployment rate of around 5.0 percent to be normal (because layoffs always happen as do workers quitting their jobs). Subsequently, with a 4.7 percent rate as of December, many economists consider the U.S. to be at or near full employment.

In order for the BLS to count workers as unemployed, they must have been actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in December was 7.5 million, up slightly from 7.4 million in November.

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 was 5.6 million, down slightly from 5.7 million in November.

The average workweek for all part-timers and full-timers in the private sector was 34.3 hours in December, down slightly from 34.4 hours in November.

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 1.7 million, down from 1.9 million in November. Among the marginally-attached, 426,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. That was down significantly from the 591,000 that the BLS reported in 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 1.8 million in December, down slightly from 1.9 million in November. These workers accounted for 24.2 percent of the unemployed. 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, 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 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the January 2017 unemployment rate and job numbers on February 3. 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).

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