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The economy added a seasonally adjusted 145,000 jobs last month and unemployment stayed at a 50-year low of 3.5%, capping a 10th straight year of payroll gains and the longest stretch in 80 years of data. Jeff Sparshott and Greg Ip here to take you through some of the numbers.
The Roaring ’10s
The 2010s were the best decade for job growth on record. Since the end of 2009, employers added 22.58 million jobs. That surpassed the 1990s for the most total job growth during a decade. It’s a dramatic turnaround from the first decade of the century—which included two recessions—when payrolls fell by nearly 1 million. However, the 2010s’ big gain is partly a function of population growth. In terms of percentage increases, the 17.4% gain was the second-smallest in the past 80 years. For example, payrolls grew 38% in the 1940s and 20% in the 1990s. —Eric Morath and Soo Oh
KEY THEMES
Big Shift
Women held more jobs than men in December for the first time in nearly a decade. There were 109,000 more women than men on U.S. payrolls. The figures don’t include farm labor or self-employment, where men tend to outnumber women. “However, a look at cyclical dynamics implies that the women have the initiative in traditional employment,” said RSM US economist Joseph Brusuelas. “We all often look for tangible evidence of change. It is now here in the data and can be used as a benchmark to measure equality and inequality in the labor force and the economy.”
The big driver: Women dominate employment in fast-growing sectors like education and health care, Amara Omeokwe reports.
Not So Goods
Overall job growth in 2019 looked much like 2018—but trends beneath the surface diverged sharply. Goods-sector employment, which boomed in 2018, grew just 0.8% in the year through December 2019. Service-sector employment grew 1.5%, virtually the same as in 2018. Since 2012, U.S. goods-sector employment has experienced two boom-bust cycles coinciding with the peaks and troughs for global growth. In 2017 and early 2018, global growth helped U.S. exports and commodity prices while a federal tax cut and spending boost in early 2018 aided domestically focused manufacturing like autos. Total manufacturing rose 0.4% in 2019 through December but within that category, motor vehicles and parts slipped 1.8% and primary metals by 3%. Mining sank 3.4%. In the opposite direction, lower interest rates helped construction employment rise 2%. This year, stabilizing global growth and easing trade tensions should also help goods employment recover. —Greg Ip
Maturing Jobs Market
2019 was the weakest year for job growth since 2011. The economy added 2.1 million jobs, significantly below 2018’s pace. That reflected employers’ difficulty finding enough workers, global economic uncertainty and the fading effects of 2018’s tax cuts.
One puzzling development: Wage growth decelerated. “Job growth in December and on a trend basis remains firm enough to continue putting gradual downward pressure on the unemployment rate, and labor participation trends remain strong, but inflationary pressures are few and far between, supporting the Fed’s on hold stance this year,” Morgan Stanley economist Robert Rosener said.
So how low can unemployment go without spurring inflation? That’s an open question—and one the Federal Reserve seems to have missed the mark on for quite some time. Back in 2012 and 2013, central bank officials thought the natural unemployment rate—the lowest sustainable without fueling inflation—was 5.6%. In any event, the December employment report is likely to keep the Fed comfortable with its make-no-moves posture. At officials’ most recent policy meeting in mid-December, they signaled plans to keep interest rates steady for the next few months so long as the economic outlook didn’t darken significantly.
And let’s wrap up with two positive developments: The broadest measure of unemployment fell to the lowest level on record, suggesting that people who are looking for a full-time job are having more success in finding one.
And the share of workers age 25 to 54—years when school and retirement aren’t typically a factor—with a job rose to the highest level since 2001.
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ECONOMISTS ARE SAYING
“The solid jobs figures add to the evidence from the incoming activity data, which suggest the economy is nearing a turning point, with economic growth likely to bottom out close to 2.0% annualised and reaccelerate back above trend in the second half of 2020.” —Michael Pearce, Capital Economics
“Pay growth remains the one aspect of the job market that still hasn’t fully recovered in the decade since the Great Recession.” —Andrew Chamberlain, Glassdoor
“The labor market performance continues to provide a solid foundation for the main pillar of growth: consumer spending. However, as we look into 2020, lingering global headwinds, policy uncertainty and cautious businesses are likely to restrain labor demand amid an increasingly tight labor market.” —Lydia Boussour, Oxford Economics
“The labor market is still very strong, more than sufficient to absorb new entrants to the labor force and to support robust consumption.” —Eric Winograd, AllianceBernstein
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