Job market ends 2019 with disappointing 145,000 growth in payrolls
The U.S. jobs market ended 2019 on a sour note, with December’s payroll and wage growth missing expectations, according to Labor Department figures released Friday.
Nonfarm payrolls increased by just 145,000 while the unemployment rate held steady at 3.5%. Economists surveyed by Dow Jones had been looking for job growth of 160,000. The jobless rate met expectations for staying at a 50-year low.
In addition to the slow payroll growth, average hourly earnings rose by just 2.9%, below the 3.1% projection. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
Revisions to the October and November counts brought those two months down by 14,000 as well. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000.
“After a strong 256,000 gain in payrolls in November, boosted by the return of 40,000 GM workers, some slowdown in the pace of job gains in December was inevitable,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note. Pearce characterized the job growth as “solid” even though it missed estimates, and said “we expect solid gains in payrolls to extend through 2020.”
Dow futures turned negative following the disappointing report.
Lowest since 1994
On the upside, a separate, more encompassing measure that includes discouraged and underemployed workers fell to 6.7%, the lowest it’s ever been in records going back to 1994. The decline came amid a drop of 140,000 in people working part-time for economic reasons.
The labor force participation rate held steady at 63.2% as the workforce rose by 209,000 to 164.6 million and those considered no longer in the job pool fell by 48,000 to 95.6 million.
The total employment level rose to 158.8 million, also a fresh high. However, the unemployment rate for African Americans rose 0.3 percentage points to 5.9%.
For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011 — three years after the start of the financial crisis — and down considerably from the 2.7 million positions added in 2018.
The numbers follow a year of anxiety about a potential recession on the horizon. While fears of an outright downturn have largely been eradicated, recent surveys among corporate executives show a high level of unease about slowing growth.
Manufacturing job declines
Job gains in December came primarily from retail (41,000), leisure and hospitality (40,000) and health care (28,000).
Construction rose by 20,000 and professional and business services saw an increase of 10,000, while manufacturing declined by 12,000, transportation and warehousing lost 10,000 and mining fell by 8,000.
It was a difficult year for manufacturing jobs: The sector saw a net gain of just 46,000 compared with a 264,000 gain the year before. The U.S. and China spent the year locked in a trade battle that saw billions of dollars in tariffs exchanged between the two sides.
The average work week, considered a good indicator for employers’ future intentions, held steady at 34.3 hours.
The Labor Department also released its annual revisions to its household survey data, but there were no changes to monthly unemployment rates throughout the year.
Correction: This report was corrected to show that the October job gains fell to 152,000, making the total revisions for October and November down by 14,000.