December’s Jobs Report from the Bureau of Labor Statistics showed that 50,000 jobs were added – below the expected 73,000.The unemployment rate moved down from 4.5% to 4.4%.
What’s the bottom line?
While the headline numbers appear mixed, revisions remain a critical part of the story. October and November payrolls were revised down by a combined 76,000 jobs, and it will be important to see whether December’s already modest gain is also revised lower in the months ahead. In addition, the unemployment rate was revised higher in three different months last year, pointing to more underlying labor market weakness than the initial reports suggested.
Sector details also raise concerns. Most of December’s job gains came from health care and social assistance (+39K jobs) and leisure and hospitality (+47K). Health care hiring tends to be steady and less sensitive to economic conditions, while leisure and hospitality typically sees a seasonal boost in December due to holiday travel. Excluding these sectors, overall job growth would have been negative once again.
