Keeping you up to date on the latest data releases.
Nonfarm payrolls rose by 200,000 in December, following an downwardly revised 100,000 gain in November (though October’s estimate was revised upward nearly offsetting November’s adjustment). For 2011 as a whole, total nonfarm payrolls rose by 1.6 million workers. Though after excluding the government sector, which shed nearly 300,000 workers over the year, private payrolls rose 1.9 million. December’s overall gain, which came in above expectations of roughly 150,000, was bolstered by a particularly large jump in transportation and warehousing (up 50,000). The release noted the jump was due to strong seasonal hiring. Interestingly, we saw a similar gain in this series last December that was almost completely wiped out in January. Goods-producing payrolls posted their strongest monthly gain since July, rising 48,000 in December. Gains were spread across the sector, with construction employment jumping up 17,000 (following two consecutive declines that totaled 22,000), manufacturing payrolls that rose 23,000 (more than doubling its total gain over the last 4 months), and mining & logging employment that continued to post modest gains (up 8,000).
On the service side, retail trade employment rose by 28,000 in December, compared to a 39,000 increase in November, totaling a 240,000 gain in 2011 as a whole. Healthcare payrolls continued its steady upward march, rising 29,000 during the month. Employment in the healthcare sector rose by 315,000 in 2011, and by roughly 820,000 since the end of the recession. As an aside, employment in this sector did happen to swell by a little over half a million during the recession). Aside from the surprise in transportation and warehousing, modest gains were seen across other service industries.
Elsewhere on the establishment side of the report, the average workweek did tick up 0.1 hour to 34.4 hours and average hourly earnings rose by 0.2 percent to $23.24. On the year, average hourly earnings rose by 2.1 percent, though (barring a shock in December’s inflation data) failed to keep pace with the rise in the CPI. On the household side, the unemployment rate edged down 0.2 percentage points to 8.5 percent. This follows what we thought was a somewhat shocking 0.4 percentage point (pp) decrease in November, though after a revision to the seasonal factors in 2011, that became a 0.2 pp decline down to 8.7 percent. The unemployment improved modestly during 2011, falling nearly a percentage point—from 9.4 percent to 8.5 percent. However, this improvement came as the civilian labor force, which usually adds a little more than 1 million workers a year, was roughly stagnant. An alternative measure of labor market health—the employment-to-population ratio—stands at 58.5 percent, and has yet to show any significant improvement since the recovery began.