Latest U.S. Jobs Report Rings Out 2015 on a High Note

Forward looking businessman

Because the first Friday of January was also the New Year's Day holiday, we get our previous month's employment report from the U.S. Bureau of Labor Statistics one week later on Jan. 8 this month. The delay is more than compensated for, however, by the substance of the latest report, with 292,000 jobs added for December 2015, and job figures revised upward for the two months preceding.

 

October got a bump from 298,000 to 307,000 (+9,000) and November jumped from 211,000 to 252,000 (+50,000). Do the math for the final quarter of 2015, and jobs added averaged at a healthy and welcome 284,000 per month, as close to economists' "magic number" of 300,000 new jobs per month as we've been since before the downturn of 2008.

 

In fact, with October numbers revised upward to 307,000, October represents the first time those numbers have crossed that threshold since before 2008 as well. Could this be a new trend, or is it just a blip? Only time will tell ... but I sure hope we're finally moving toward what would constitute genuine economic growth.

 

Why is 300,000 jobs per month a "Magic Number?"

 

Economists have long asserted that this number represents a growth level where we can not only absorb new entrants into the workforce (people graduating from school and taking their first "real jobs" in other words), but also where we can finally start whittling away at the number of those who've been unemployed for some time now. (The "long-term unemployed," as they're oftend called.)

 

What else did we learn?

 

The January report from the U.S. BLS, in addition to reporting on employment figures for the preceding December, also supplies some annual summary data. Here's what that report says about unemployment in general:

 

? At the end of 2015, the unemployment rate was 5.0 percent, and the number of unemployed 7.9 million. Though that rate didn't budge in the last quarter of 2015, it is down by 0.6 percent for the year (since the end of 2014, that is), with an overall reduction in the total number of unemployed persons by 800,000.

? The number of long-term unemployed, which the U.S. BLS counts as "those jobless for 27 weeks or more," is 2.1 million as of December 2015, and accounts for 26.3 percent of the total unemployed figure of nearly 8 million. There has been little change in this number since the middle of 2015 (June), but it has come down by 687,000 since the end of 2014.

? The civilian labor force participation rate (which measures the number of people aged 16-65, versus the number of such people not in the military) is 62.6 percent for December, a number that has changed very little in recent memory. The employment-population ratio is 59.5 percent. That figure, which measures the total number of people working full-time and/or part-time, vis-�-vis overall population, is another statistic that hasn't moved much in the last year.

? People employed part-time for what the U.S. BLS calls "economic reasons" (synonymous with "involuntary part-time workers") currently stands at 6 million as of December, and has also changed little in the last half year. That number is, however, 764,000 smaller than it was at the end of 2014.

 

What really needs to happen for the tentative emergence of the "magic number" to mean something significant is a measurable downward trend in the number of the unemployed in general — especially the long-term unemployed — and the number of involuntary part-time workers as well. We're seeing some modest signs of reduction in those numbers, but more aggressive reductions would indicate a more robust economy (or economic recovery, if you prefer).

 

What's the outlook for the Information Sector (IT Jobs) for 2016?

 

The unemployment numbers by sector, as reported in Table A-14 of the U.S. BLS report ("Unemployed persons by industry and class or worker, not seasonally adjusted") tell an interesting story for the Information Sector when comparing 2014 and 2015. (Other sectors where IT workers appear include primarily Professional and Business Services, with a smattering of IT folks in various other sectors, including Government, Financial Services, and so forth.)

 

At the end of 2014, there were 167,000 unemployed in that sector which represented 5.7 percent unemployment, for a total sector population of 2.93 million persons. At the end of 2015, there were less than half that number unemployed, at 81,000, which represented 2.9 percent unemployment — a total sector population of 2.79 million persons. This indicates a reduction in the sector size for 2015 of 140,000 jobs, which is not good news for IT workers.

 

It also seems clear, however, that at 2.9 percent unemployment, there's no more room to cut IT workers anywhere, in anybody's budgets. My gut feel is that if any kind of economic upswing is underway — and the final quarter of 2015 says we're getting close, if not already there — then IT employment can't help but go up in 2016.

 

I believe the total population of the Information Sector will rise, but that the unemployment rate will also rise somewhat along with it. Remember: Most economists say an unemployment rate of 4-to-5 percent represents "full employment." A rate of 2.9 percent is far enough below that range that I have to forecast growth for this year.

 

I'd imagine that all of us who work in and around IT will hope I'm right about this. As with all things future-looking, of course, only time will tell! It does, however, make me feel more confident in wishing all of my readers a safe and prosperous 2016!

 

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About the Author

Ed Tittel is a 30-plus-year computer industry veteran who's worked as a software developer, technical marketer, consultant, author, and researcher. Author of many books and articles, Ed also writes on certification topics for Tech Target, ComputerWorld and Win10.Guru. Check out his website at www.edtittel.com, where he also blogs daily on Windows 10 and 11 topics.