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December 2017 Jobs Report

U.S. Employment Moderates in December

Tuesday, January 9, 2018

The U.S. economy added only 148,000 jobs in December, according to the U.S. Bureau of Labor Statistics (BLS). Though this figure was below many economists’ expectations, it was the 87th consecutive monthly gain. The U3, or “headline,” unemployment rate remained at 4.1% for the third straight month and was 60 basis points (bps) lower than December 2016’s rate.

Revisions to the previous two months’ numbers resulted in a net decrease of 9,000 jobs to the estimates. October’s job-gain figure of 244,000 was revised downward to 211,000, while November’s was revised up from 228,000 to 252,000.

 

IN THIS ISSUE

Job Gains Slow in 5 of Top 10 Markets

Mining & Logging Employment Rebounds

By the Numbers

Annual job growth was 1.4% in December, the same as November, but 20 bps less than December 2016. Annual job gains exceeded two million again at 2.055 million, although this was 185,000 less than December 2016’s total.

Average hourly earnings (wages) for privately employed workers were up by 9 cents from November, and December’s average of $26.63 represented a 2.5% increase from a year ago. Annual wage growth has averaged close to 2.6% since late 2016.

Job gains and unemployment rate data 

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The civilian labor force participation rate was unchanged from last month and one year ago at 62.7%, while the employment-population ratio of 60.1% also was unchanged from the previous month, but was 30 bps higher than last year.

The number of part-time workers for economic reasons (4.915 million in December) increased by 64,000 from November, but was down by 639,000 from December 2016. The U6 unemployment rate, which includes these part-timers and marginally attached workers, increased 10 bps to 8.1% in December, but was down 100 bps from December 2016.

The number of long-term unemployed (27 weeks or more) decreased by 78,000 from November and 354,000 from December 2016 to 1.52 million on a seasonally adjusted basis. The number of multiple jobholders increased by 89,000 from December 2016 to 7.6 million, and the number of discouraged workers not in the workforce (474,000) increased by 48,000 from one year ago.

Industry Focus

The not seasonally adjusted unemployment rate for the Mining/oil & gas industry increased the most in December from last year, jumping 140 bps, while Information rose 70 bps to 3.8%. Construction fell 150 bps and Other Services dropped 140 bps. Financial Activities and Professional & Business Services each fell 110 bps. The remaining industry sectors dropped from 20-70 bps, except for Government (up 30 bps) and Education & Health Services (up 10 bps).

Job gains by industry

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Seasonally adjusted industry gains were moderate in December, compared to November, led by Construction (+30,000), Leisure & Hospitality (+29,000), Education & Health Services (+28,000) and Manufacturing (+25,000). Trade, Transportation, & Utilities was the only industry to shed jobs last month (-10,000), while Mining & Logging was a net zero.

Job gains by industry chartJob gains by industry chart

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  • The Construction industry had one of its strongest monthly gains since early in 2017, with solid improvement in residential and nonresidential specialty trade contractors (+10,000 and +13,800, respectively). The residential construction of buildings subsector added another 8,200 jobs in December.

 

  • Leisure & Hospitality had another strong month, with the bulk of job gains in the food services and drinking places subsector (+25,100). Arts, entertainment, and recreation increased by 3,800 jobs in December.

 

  • Ambulatory health care services (+14,800), hospitals (+12,400) and nursing and residential care services (+4,200) brought the health-care sector gains to 31,400 jobs in December. The social assistance and educational services sectors lost 2,200 and 300 jobs, respectively in December.

 

  • Manufacturing gained more than 20,000 jobs for the third straight month and has added 196,000 jobs for the year. Hiring was very strong in durable goods manufacturing (+21,000), particularly in machinery (+6,000) and fabricated metal products (+5,400). Nondurable goods manufacturing added just 4,000 jobs last month.

 

  • The Professional and Business Services supersector’s job gains (+19,000) were strongest in administrative and waste services (+20,200) and moderate in several subsectors. However, accounting and bookkeeping services lost 15,400 jobs.

 

  • The Other Services sector added a solid 12,000 jobs, with more than half of the gain in membership associations and organizations (+6,300).

 

  • The Information industry had its first significant monthly gain since September 2016 (+7,000), but lost 40,000 jobs for the year. Almost all of December’s gain occurred in the motion picture and sound recording subsector (+7,400).

 

  • The Financial Activities industry’s 6,000 new jobs were spread between finance and insurance (+3,700) and real estate and rental leasing (+2,200).

 

  • Government industry employment added only 2,000 jobs, as gains in local (+5,000) and federal (+1,000) subsectors were offset by losses at the state level (-4,000), most of that in state government education (-3,000).
  • The Mining & Logging industry was a net zero for monthly job gains in December, but employment was up by 59,000 jobs for the year.

 

  • Modest gains in wholesale trade (+9,800) could not offset steep losses in retail trade (-20,300), in the Trade, Transportation and Utilities industry. General merchandise stores (-27,300) were particularly hard hit. Transportation and warehousing gained 1,800 jobs, though Utilities lost 900 jobs.

 

Job Gains Slow in 5 of Top 10 Markets

Eight of the top 10 metros from October returned in the list for November (the latest metro data available), but several changed places.

New York and Dallas retained the top two spots, although gains in Dallas for the 12 months ending November dropped from 101,900 last year to 73,100 in 2017. Boston moved up to No. 3, displacing Atlanta to No. 4 after Atlanta gained 38,100 fewer jobs than last year. Houston retained its No. 5 spot, and Riverside continued to climb up the list to No. 6. Phoenix rejoined the top 10 at No. 7 as Minneapolis-St. Paul slipped to No. 8 from No. 6 in October. Seattle also retained its spot from last month at No. 9, and Orlando inched up to No. 10 from No. 11 in October.

Farther down the list, both Washington, DC and Los Angeles fell out of last month’s top 10 to Nos. 11 and 12, respectively. San Antonio and Tampa returned at Nos. 13-14, and Austin jumped to No. 15 from No. 23 in October. Fort Worth rounded out the major metros in Texas with solid job gains and returned at No. 16 on the list.

With slower job growth in half of this month’s top 10 metros, the total jobs created in the top 10 for the 12 months ending in November were up slightly (+0.9%) from October’s annual total (545,700 vs. 540,900), and were almost unchanged (+0.4%) from the 12-month total for November 2016 (545,700 vs. 543,500). A comparison of the same top 10 metro job-gainers from October to November revealed a 6.2% increase in annual job gains (led by gains in Houston and Boston).

Other major metro movers included:

  • Milwaukee jumped from No. 97 to No. 64.
  • Memphis moved up from No. 94 to No. 74.
  • Denver went from No. 37 to No. 20.

Several metros moved down the list:

  • Cleveland fell from No. 36 to No. 77.
  • West Palm Beach dropped from No, 51 to No. 87.
  • Philadelphia slipped from No. 40 to No. 55.

California metros continued to experience mixed results: Anaheim, San Francisco, Oakland, San Jose and San Diego moved up in the rankings, while Los Angeles, Oxnard and San Jose moved down the top 120 list. Forty-two of the top 120 remained in the same spot or moved up or down one or two spots.

Annual job growth slowed in five of the top 10 markets in November:

  • Atlanta (-152 bps)
  • Dallas (-129 bps)
  • Seattle (-93 bps)
  • Orlando (-42 bps)
  • Phoenix (-6 bps)

Job growth was up in:

  • Houston (+126 bps)
  • Boston (+85 bps)
  • Riverside (+65 bps)
  • Minneapolis (+59 bps)
  • New York (+2 bps)

Four of the bottom five returned from last month. Annual job losses intensified in Newark and Akron from last month’s annual pace, while Tucson and Virginia Beach’s annual job losses were lessened. New Orleans replaced Knoxville in the bottom five list in November.

Newark saw weaker gains in several employment industries and steeper losses in wholesale and retail trade (-5,000), employment services (-2,800) and food services (-3,300). Akron’s losses continued in accommodation and food services (-1,600) and Professional & Business Services (-1,400), while New Orleans experienced losses in the local government (-2,300), retail trade (-1,800) and food services sectors (-1,700).

Top-bottom metro job gains table

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Access the current job-growth spreadsheet here.

Please contact us if you have any questions. Info@axiometrics.com

 

Mining & Logging Employment Rebounds

The United States has become one of the world’s top producers of oil and gas in recent years, primarily because of the explosion of shale play exploration (fracking) and existing fields. Two of the top states for production have been Texas and, more recently, North Dakota. Texas has three of the five most productive shale plays in the U.S., and North Dakota contains the majority of the Bakken Shale play.

With this production surge came jobs. In the post-recession boom in energy production, rig counts peaked in June 2012 at 932 in Texas and 200 in North Dakota. At the same time, Mining & Logging 12-month job gains (primarily oil and gas production and support) peaked at almost 40,000 in Texas and more than 9,000 in North Dakota.

Both Texas and North Dakota experienced steep drops in Mining & Logging jobs after the oil-price collapse of mid-2014. The price collapse was caused by a worldwide oversupply and overproduction of oil, which outpaced demand, and a combination of other factors.

In the wake of that collapse, the price per barrel of West Texas Intermediate fell from more than $100 in the summer of 2014 to less than $30 in early 2016. Production (as measured by the rig count) pulled back sharply and fell to lows of 179 and 24 for Texas and North Dakota, respectively, by May 2016.

Oil and gas job gains chart

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As seen in the chart above, job losses in Mining & Logging plunged to 75,600 in January 2016 for Texas and 13,300 for North Dakota. Based on the level of employment, North Dakota experienced a bigger annual percentage drop that month (-43.6% vs. -23.9% for Texas). Conversely, when oil and gas jobs returned to North Dakota in the past several months, its annual percentage growth was greater than Texas’ (25.6% vs. 15.0% for November 2017).

Annual job gains are currently averaging close to the levels they were just prior to the price collapse. Texas’ annual Mining & Logging gain through November of 32,700 is already above the 28,000 jobs added in 2014, while North Dakota’s November figure of 4,000 jobs gained is slightly above 2014’s average of 3,800 new jobs.

Interestingly, oil production in thousands of barrels declined by only 6%-8% in Texas and about 10%-17% in North Dakota during the period when rig counts fell by 50%-70% in both states.

Oil and gas job gains-Rig Count chart

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By the Numbers

The following table shows November 2017 (the latest data available) metropolitan-area job gain and job growth, some grouped by state or region.

Metro job gains table

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