By: Russ Swansen, Chief Investment Officer, Thrivent Asset Management January 09, 2017
U.S. employers added 156,000 new nonfarm jobs in December, according to the U.S. Department of Labor, Bureau of Labor Statistics Employment Situation report issued Jan. 6.
That marked the 75th consecutive month of job growth. The unemployment rate edged up slightly for the month, from 4.6% to 4.7% as more people entered the workforce in search of employment. The unemployment rate for several months has been hovering around the 4.8% rate the Federal Reserve board has said it thinks may be full employment.
The economy added a total of 2.2 million new nonfarm jobs in 2016, which was half a million fewer new jobs than the 2.7 million added in 2015. On average, employers have added about 180,000 jobs per month this year, down from an average of 229,000 new jobs per month in 2015. We believe the declining pace of job growth is the natural result of the drop in the unemployment rate over the past few years.
After declining by 2 cents in November, average hourly earnings for all employees on private nonfarm payrolls moved up by 10 cents in December to $26.00. Earnings rose 2.9% for all of 2016.
Here are some of the other key trends highlighted in the report:
- The number of unemployed persons looking for jobs edged up slightly from 7.4 million to 7.5 million for the month.
- The number of long-term unemployed (those jobless for 27 weeks or more) declined slightly from 1.9 million to 1.8 million in December, but remains at an elevated level. That accounts for 24.2% of the unemployed, which was also down slightly from 24.8% the previous month. During 2016, the number of long-term unemployed declined by just 263,000.
- The labor force participation rate for those in their prime working years (age 25-54) remained at a low level of 81.4%, which is about 1.6% below the pre-recession level.
- The average workweek was unchanged at 34.3 hours, which is in a range comparable to that preceding the last recession.
- The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) remains high, but dipped from 5.7 million to 5.6 million in December. It was down by 459,000 for the full year.
- Initial jobless claims, reported weekly, remained at a very low level.
Strong job growth contributed to the Federal Reserve Board’s decision to raise rates in December. If employment figures remain strong, we believe that will encourage further rate hikes during 2017. We believe that a series of small rate hikes during the year would be beneficial to net savers without materially affecting the economy or consumer spending.
Media contact: Callie Briese, 612-844-7340; firstname.lastname@example.org
All information and representations herein are as of January 6, 2017, unless otherwise noted.
The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management associates. Actual investment decisions made by Thrivent Asset Management will not necessarily reflect the views expressed. This information should not be considered investment advice or recommendations of any particular security, strategy or product.
Asset management services are provided by Thrivent Asset Management, LLC, a wholly owned subsidiary of Thrivent Financial, the marketing name for Thrivent Financial for Lutherans.
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