The Bureau of Labor Statistics (BLS) reported that there were 216,000 jobs created in December, which is stronger than the 170,000 that were forecasted. However, revisions to October and November removed 71,000 jobs in those months combined. The unemployment rate held steady at 3.7%.
What’s the bottom line? While the headline job growth figure for December appears strong on the surface, future revisions lower are a very real possibility. Job creations were slashed for almost every month last year in subsequent reports, to the tune of nearly 500,000 less jobs than originally reported. In addition, there are two reports within the Jobs Report and there is a fundamental difference between them. The Business Survey is where the headline job number comes from, and it’s based predominately on modeling and estimations.
The Household Survey, where the Unemployment Rate comes from, is considered more real-time because it’s derived by calling households to see if they are employed. This survey has its own job creation component and it told a completely different story, showing 683,000 job losses. And of note, average weekly hours worked also declined slightly, which is important because one of the ways businesses cut costs is to cut the number of hours worked. On average the entire labor force is working 30 minutes fewer per week, which equates to 2 million job losses on its own.