Hiring Rises for Record-Breaking 87th Consecutive Month
The pace of hiring slowed a bit in the final month of 2017, but remained robust for the year. The jobless rate held at a 17-year low, signs the broader labor market maintains momentum as we begin 2018.
Nonfarm payrolls rose a seasonally adjusted 148,000 in December, the Labor Department said last week. That brought employment gains for the year to 2.1 million, the seventh straight year of increases exceeding two million. It is only the second time on record—the other being in the 1990s—when the economy has produced jobs at that pace for that long.
The unemployment rate remained at 4.1 percent, matching the lowest level since December 2000 for the third straight month, with benefits hitting a widening swath of the population.
Hiring has now risen for 87 straight months, the longest uninterrupted period of job expansion on record. The second longest run of job expansion—between 1986 and 1990—was only about half as long.
The current labor-market expansion is more notable for its length than its strength. Payrolls grew by better than 2.5 percent annually, on average, during the economic expansions in the 1960s, 1980s and 1990s. Payroll growth has topped 2 percent for the year only once in the current upturn. That was in 2014. It was 1.4 percent in 2017, the smallest annual increase since 2010.
Construction led the pack with strong hiring in December, along with health care and food services. The report showed employers added jobs in manufacturing, construction and health care in December. Employment fell in retail.
In theory, wage growth should be picking up as available workers become more scarce and businesses compete for labor. But average hourly earnings rose 2.5 percent in December from a year earlier, a similar, modest pace as maintained since early 2015.
As the expansion rolls on, companies are reporting increasing trouble finding qualified workers. That could spur wage gains in the months ahead.
The Labor Department reported that U.S. filings for unemployment benefits plummeted to the lowest level in almost 45 years. The drop in claims shows that companies are increasingly holding on to their employees amid a shortage of skilled labor.
The data suggests the unemployment rate could be poised to decline further.
Source: The Wall Street Journal