The
Bureau of Labor Statistics‘ (
Observations
from the employment reports include:
*
The establishment (+199,000 jobs) and household surveys (+651,000 employed)
were again poorly correlated.
*
Goods-producing industries added 54,000 jobs; service-providers: +145,000. Employment
continued to trend up in leisure and hospitality (+53,000), professional and
business services (+43,000), manufacturing (+26,000), construction (+22,000),
and transportation and warehousing (+18,700). Public-sector employment declined
(-12,000) primarily at the local level (-10,000).
As mentioned above, manufacturing added 26,000 jobs. That result is consistent with the change in the Institute for Supply Management’s (ISM) manufacturing employment sub-index, which expanded more rapidly in December. Wood Products employment rose by 1,300 (ISM fell); Paper and Paper Products: -1,500 (ISM fell); Construction: +22,000 (ISM rose).
* The number of employment-age persons not in the labor force dipped slightly (-60,000) to 99.8 million; that is 4.8 million higher than in February 2020. With the labor force expanding, the employment-population ratio (EPR) edged up to 59.5%, another pandemic high; even so, the EPR is 1.7PP below the February 2020 level.
* Although the civilian labor force expanded by 168,000 in December, the labor force participation rate was unchanged at 61.9%. Average hourly earnings of all private employees increased by $0.19 (to $31.31), and the year-over-year increase decelerated to +4.7%. For all production and nonsupervisory employees (shown above), the tale was much the same: hourly wages rose by $0.18, to $26.61 (+5.8% YoY). Since the average workweek for all employees on private nonfarm payrolls was unchanged at 34.7 hours, average weekly earnings rose (+$6.60) to $1,086.46 (+4.9% YoY). With the consumer price index running at an annual rate of +6.8% in November, the average worker continues to lose purchasing power.
* Full-time jobs jumped (+803,000) to 130.2 million; nonetheless, there are now nearly 648,000 fewer full-time jobs than in February 2020. For perspective, the non-institutional, working-age civilian population has risen by over 2.5 million during that period. Workers employed part time for economic reasons (shown in the graph above) -- e.g., slack work or business conditions, or could find only part-time work -- retreated by 337,000, along with those working part time for non-economic reasons (-125,000); multiple-job holders rose by 330,000.
For a “sanity test” of the job numbers, we consult
employment withholding taxes published by the U.S.
Treasury. Although “noisy” and highly
seasonal, the data show the amount withheld in December leapt by $107.4 billion,
to $351.1 billion (+44.1% MoM; +42.1% YoY); that amount is over 22% higher than
the previous record set back in March 2020. To reduce some of the monthly volatility
and determine broader trends, we average the most recent three months of data
and estimate a percentage change from the same months in the previous year; the
average of the three months ending December was 29.7% above the year-earlier
average. There has been disagreement in the past between the jobs and withholding-tax
reports, but this disparity is eye catching; either there was a wave of hiring after
the employment survey week or else the BLS has grossly misestimated the
strength of hiring.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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