December 2014 employment: Good news, bad news, same news
Yesterday was the first Friday of the month, the day upon which the U.S. Bureau of Labor Statistics almost always releases employment statistics for the preceding month. In this case, the month reported was December 2014, to close out the previous year. A healthy jobs-added number of 252,000 was posted for December, and job counts for October and November were both revised upward (+18,000 for October to 261,000, and +32,000 for November to 353,000). The total number of jobs added for 2014 came in around 2.5 million and that's the best year overall since 1999, as this chart from The Atlantic clearly illustrates:
2014 beats anything so far this century, and comes within 17% of the best year shown, 1999. [Source: The Atlantic]
You'd think this kind of news would be perceived as an unalloyed positive, but U.S. markets dropped around one percent yesterday (DJIA -0.95 percent, S&P500 -0.84 percent, NASDAQ -0.68 percent). Why might this be? There are lots of reasons, actually. Let me point out a few:
1. The average hourly wage decreased by 5 cents an hour in December to $24.57, and overall growth for 2014 was a paltry 1.7 percent, just barely above the 1.3 percent inflation rate calculated for the period from November 2013 to November 2014.
2. The average workweek stands unchanged at 34.6 hours for December, reflecting less than 100 percent employment for the current working population overall.
3. Civilian labor force participation edged down slightly again by 0.2 percent to 62.7 percent. The latest BLS report observes, "Since April, the participation rate has remained within a narrow range of 62.7 to 62.9 percent." As this BLS calculator on that metric shows, this is down by 3.5 percent since 2004, and down 4 Percent since 1994).
I've been characterizing the employment situation in the USA as "stuck in slow growth mode" since 2011 or thereabouts. That characterization remains accurate today. Even though conditions keep improving, those improvements are so gradual as to defy positive expectations, or to create the kind of hiring climate where employers are ready to hire aggressively, and employees feel better about themselves, their prospects, and their financial well-being. As a consumer driven economy, the impact of minimal wage growth on the vast majority of wage earners continues to drag on our economy.
Here's another little snippet from The Atlantic that should explain attitudes in the information sector. Their graph of "Job Growth by Major Industry" shows the information sector dead last, with a net gain of only 17,000 jobs for the whole year. Table A-14 from the most current BLS report also shows employment declining in Information from 2013 with 133,000 unemployed workers in December 2013 at 4.8 percent unemployment, with sector figures climbing to 167,000 in December 2014 representing 5.7 percent unemployment.
That puts the size of the IT workforce at 2.9 million, which means that the 17,000 jobs added in 2014 is just over one half of one percent (0.0059) for the year. Those numbers don't extend much joy or enthusiasm into our home sector, either. And because IT is rightly regarded as an engine for overall economic growth, it doesn't augur well for prospects in 2015 for IT workers. Sigh.
Let's hope that falling oil prices and an upsurge in confidence can get our consumer economy turning over more quickly than the current prevailing somewhat ragged idle it seems stuck in. That's what I have to believe will be needed to get the numbers jumping, and boost attitudes and outlooks for our economic future.