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The employment market cooled off slightly in December as employers added 148,000 new jobs, according to the U.S. Bureau of Labor Statistics Employment Situation Report issued January 5. For all of 2017, the economy added about 2.1 million jobs – an average of about 175,000 jobs per month.

During each of the previous two months, employers added more than 200,000 jobs. But while the pace of growth slowed in December, the unemployment rate remained unchanged at just 4.1% -- the lowest level since December 2000. It also marked the 87th consecutive month of employment gains.

For all of 2017, the unemployment rate was down by 0.6% and the number of unemployed persons fell by 926,000.

unemployment

Wages also continued to edge up, with a $0.09 increase over the previous month, from $26.54 to $26.63. Over the all of 2017, average hourly earnings rose by 65 cents, or 2.5%.

average hourly earnings percent change

Initial jobless claims have remained at an extremely low level, with 250,000 claims filed the week ending December 30, according to the Department of Labor Unemployment Insurance Weekly Claims report. The 4-week moving average was 241,750, an increase from the previous month’s level of 238,250. The recent jobs claims average has been at the lowest level since April 7, 1973.

initial unemployment claims

The advance number for seasonally adjusted insured unemployment during the week ending December 23 was 1,914,000, a slight increase from a month earlier of 1,908,000. The insured unemployment average over the past few months has been in a range lower than at any period since 1973. This is even more impressive considering that the size of the labor force is much larger today than it was 45 years ago.

Jobless claims have remained under 300,000 for 148 consecutive weeks – the longest stretch since 1970.

Here are some of the other key trends highlighted in the Employment Situation report:

The number of long-term unemployed (those jobless for 27 weeks or more) dipped slightly from 1.6 to 1.5 million, and accounted for 22.9% of the unemployed – a 0.9% drop from the previous month. For all of 2017, the number of long-term unemployed declined by 354,000.

long-term unemployment - 27 weeks or more

The number of persons employed part time for economic reasons inched up to 4.9 million in December, but was down by 639,000 for all of 2017.

part time employment for economic reasons

The average workweek for all employees on private nonfarm payrolls was unchanged for the month at 34.5 hours.

total private average weekly hours of all employees

The labor force participation rate of 62.7% was unchanged for the month and for all of 2017. The employment-population ratio, at 60.1%, was unchanged for the month and up 0.3% for the year.

The labor force participation rate for those in their prime working years (age 25-54) was at 81.8% in December, an increase of 0.4% from a year earlier. That is about 1.2% below the pre-recession level,1 and continues to be a weakness in the employment recovery.

labor force participation rate

Economic expansion and corporate growth trends indicate that the employment market should continue to expand in the months ahead. But low wages and slow wage growth continue to be an issue. However, if job growth continues, we could see an increase in the rate of wage growth in 2018.

 

Media contact:  Samantha Mehrotra, 612-844 4197; samantha.mehrotra@thrivent.com

 

 

All information and representations herein are as of January 5, 2018, 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.


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