The Department of Labor reported an unemployment rate of 4.7percent for December, up 0.1 percent from last month.
Today’s jobs report shows an increase of 156,000 nonfarm jobs in December, lower than analysts’ prediction of job growth of 183,000. Employment for October was revised down from 142,000 to 135,000 jobs created; and November was revised up from 178,000 to 204,000.
Employment growth averaged 180,000 per month in 2016, down from 229,000 per month in 2015.
Unemployment in December among those ages 16-19 was 14.7 percent, down 0.5 percentage point from last month. For people of Hispanic or Latino ethnicity, the unemployment rate was 5.9 percent, up 0.2 percent from November. For African-Americans, the unemployment rate was 7.8 percent, down 0.2 percentage point from the prior month.
The number of long-term unemployed, those unemployed for 27 weeks or more, was 1.8 million, down from 1.9 million last month. They account for 24.2 percent of the unemployed, down from 24.8 percent in the prior month.
The “real” unemployment or U-6 rate is 9.2 percent, down 0.1 percent from last month. This is the total percentage of unemployed and underemployed workers. The rate averaged 8.3 percent in the two years before the recession.
The “real” number of unemployed Americans is 14.8 million. These are people who are unemployed (7.5 million), want work but have stopped searching for a job (1.7 million), or are working part time because they cannot find full-time employment (5.6 million).
In December, employment grew by 43,000 in health care; 30,000 in food services and drinking places; 20,000 in social assistance; 17,000 in manufacturing; and 15,000 in transportation and warehousing. Employment in construction fell by 3,000; mining lost 2,300 jobs; and information lost 6,000 jobs last month.
In December 2016, the Federal Reserve raised its main interest by rate 0.25 percent, its second rate increase in nearly 10 years. In its statement, the Federal Reserve noted that information received “indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports.”
The Federal Reserve next meets January 31 - February 1.
Labor Force Participation
The labor force participation rate is 62.7 percent, up 0.1 percentage point from last month and remaining near the lowest level in 38 years.
The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63 percent. Prior to the recession, the rate was 66 percent.
The share of American adults with jobs in December was 59.7 percent, unchanged from last month. This is nearly 4 percentage points below its pre-recession peak.
Wages
In December, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $26.00. Over the year, average hourly earnings have risen by 2.9 percent.
