This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2018/01/05/business/economy/jobs-report.html

The article has changed 5 times. There is an RSS feed of changes available.

Version 3 Version 4
U.S. Added 148,000 Jobs in December; Unemployment at 4.1% U.S. Job Market’s Strength Is Allowing More to Share in Pay Gains
(about 11 hours later)
The Labor Department released the latest figures on hiring and unemployment, with another gain capping a year of increasing opportunities for American workers. The bustling United States economy is beginning to benefit some American workers who have not gotten a taste of the recovery and have been most in need of relief.
• 148,000 jobs were added last month, bringing the average over three months to 204,000. That picture was reinforced by a report on Friday from the Labor Department, which showed an increase of 148,000 jobs last month. The figure fell short of economists’ expectations, but some of the most impressive job gains in the past year were in blue-collar and service industries that pay a decent salary.
• The unemployment rate was 4.1 percent, the same as in November. Over all, average hourly earnings were 2.5 percent higher in December compared with the year before, scarcely keeping up with inflation. But other data shows that wages have increased most for the least-educated workers and for people in many industries that are generally low-paying.
• Average hourly earnings grew by 9 cents, to $26.63, bringing the year-over-year increase to 2.5 percent. “Growth is strong, and the benefits of this growth have been widely shared,” Jed Kolko, the chief economist for Indeed.com, a job-search site. “This has been a year in which some of the gaps in the economy that had been growing narrowed a bit.”
The report offers a picture of how the economy fared in President Trump’s first year in office. The numbers will be revised at least twice in the next months. But the data suggests that things have been going quite well. Manual-labor positions are the kinds of jobs that President Trump has promised to bring back in droves, so progress could be politically important. Hiring picked up fastest in construction and mining. Manufacturing, which lost jobs in 2016, expanded last year at a respectable clip, part of a global resurgence.
The December gain is the 87th consecutive month of job growth, an unparalleled stretch of good news for workers, who continue to be in high demand. Reflecting the economy’s resilience, overall hiring in 2017 was only slightly lower than in 2016 — and it has risen for 87 consecutive months, a remarkable feat.
The monthly jobs gain is below what the economy added for most of the year, but “it’s still way ahead of what the economy needs to keep up with the new, slow rate of working-age population growth,” said Jed Kolko, the chief economist for Indeed.com, a job-search site. The unemployment rate was steady at 4.1 percent, a 17-year low. The numbers point to an economy that still has some room to grow.
The number of people entering the labor force increased only slightly over the month, continuing the trend of participation rates that have not budged since 2015. That’s partly the effect of baby boomers’ heading into retirement, and the fact that the rate hasn’t gone down is a sign of the labor market’s continued appetite for new workers. In a Twitter post on Wednesday, Mr. Trump cited the unemployment rate as evidence that the economy is “only getting better!” When he took office last January, the rate was 4.8 percent.
But it may also suggest that there are still people who haven’t come back into the work force following the recession, or that they’ve tried but have been unsuccessful. Most economists say presidents do not generally determine the economy’s course, and it is too early to measure the hiring effects of the tax cut signed into law last month. But Mr. Trump’s agenda may be having an impact on the economy in other ways. His push to dismantle regulations on businesses seems to have emboldened corporations to start putting more money into machines and plants, the kind of spending that drives broad growth.
“What’s curious is why employers who are screaming that they can’t find people to hire aren’t pulling those people back in,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics. A separate survey of manufacturers released on Wednesday suggested that American factories have picked up their orders, production and hiring over the past year.
“2017 was a very strong year for the labor market,” Mr. Kolko said. Democrats offered a less sanguine view of the labor market, asserting that most Americans were still enduring paltry raises and that the Republican tax plan was a boon only to the upper stratum of the country. Among the solutions advocated by Democrats is to increase the minimum wage, as 18 states did on Jan. 1.
At the same time, job growth for the year was slightly less robust than in 2016, under President Barack Obama. And most economists think presidents do not generally determine the course of the economy, though that has not stopped Mr. Trump from taking credit. “The American economy is unbalanced,” Representative Joe Crowley of New York, the leader of the House Democratic Caucus, said in a statement. “Workers struggle to find financial security while special interests, corporations, and the richest among us enjoy lavish tax breaks.”
In a Twitter post on Wednesday, the president pointed to the 4.1 percent unemployment rate as evidence that the economy is “only getting better!” When he took office last January, the rate was 4.8 percent. Wages have been one of the most intensely debated puzzles of the labor market, with incomes growing at a more sluggish rate than the hiring demand would suggest.
It is too early to measure the hiring effects of the corporate tax cut passed last month, but Mr. Trump’s agenda may be having a positive impact on the economy in other ways. There are signs beneath the surface, though, that more widespread wage growth may be around the corner.
His push to dismantle regulations on businesses seems to have emboldened corporations to start pouring more money into machines and plants, which is the kind of spending that drives broad growth. The security industry, for example, where pay is below average, showed a 7 percent increase in hourly earnings in November from a year earlier. Workers in clothing stores and food services — two huge, generally low-paying businesses — saw wages rise by around 4 percent in that period.
Perhaps the most closely watched number in the report was the change in wages from the previous December. Year over year, earnings increased by around 2.5 percent. In areas where unemployment has dipped below the national rate, pay has begun to accelerate. Cities where joblessness is 3.5 percent or lower have had an impressive 4 percent year-over-year increase in earnings, said Ian Shepherdson, chief economist of Pantheon Macroeconomics.
Workers in financial services and the leisure and hospitality sectors saw the biggest increases over the year, with wages in both industries ticking up by around 3.6 percent. In Indianapolis, where unemployment reached 3.1 percent in November, wages for jobs in the private sector rose by nearly 5 percent in the second quarter compared with a year earlier.
“We don’t see our clients being willing to commit to wages increases on a permanent basis,” said Bill Ravenscroft, a senior vice president at Adecco Staffing USA. The agency employs around 60,000 workers, hiring more during the holiday season, and places many in distribution centers and warehouses often used by e-commerce giants. “If the unemployment rate everywhere gets to 3.5 percent, then wage growth everywhere will get to 4 percent,” Mr. Shepherdson said.
Those companies have increased pay for workers in hot warehouse markets, such as Memphis or the Inland Empire in Southern California, where they are competing with many other companies crowded into the same area, Mr. Ravenscroft said. That kind of tightening may nudge some employers who have resisted giving raises.
But instead of increasing salaries across the board, employers are vying for pickers, packers and shippers by offering new perks. Logistics companies have begun providing on-site child care, or reimbursing employees who need to put their children in day care while they work. “The wage growth rate kicking in isn’t an automatic thing that happens in the economy,” said Cathy Barrera, chief economist at ZipRecruiter, a job-listing platform. “It requires employers to feel that friction, that competition for talent, to change what they offer recruits.”
E-commerce companies have begun to raise wages in hot warehouse markets, such as Memphis or the Inland Empire in Southern California, said Bill Ravenscroft, a senior vice president at Adecco Staffing USA. The agency employs around 60,000 workers, hiring more during the holiday season, and places many in distribution centers and warehouses often used by e-commerce giants.
But employers are not taking that approach across the board. Many are vying for pickers, packers and shippers by offering new perks. Logistics companies have begun providing on-site child care, or reimbursing employees who need to put their children in day care while they work.
Some companies are entering workers in raffles every week to win laptops, televisions and tablets, or are bringing food trucks to their warehouses and paying for employees’ lunches.Some companies are entering workers in raffles every week to win laptops, televisions and tablets, or are bringing food trucks to their warehouses and paying for employees’ lunches.
“These types of benefits in the past, you associated them with Silicon Valley, start-up companies, they weren’t synonymous with your traditional employers,” Mr. Ravenscroft said. “We aren’t seeing them saying we are going to take a long-term, universal approach to raising wages.” “These types of benefits in the past, you associated them with Silicon Valley, start-up companies,” Mr. Ravenscroft said. “They weren’t synonymous with your traditional employers.” Clients are hesitant to offer permanent wage increases, he said, but that could change if the jobless rate continues to dip.
There are signs beneath the surface, though, that more widespread wage growth may be around the corner. In areas where unemployment has dipped below the national rate, pay has begun to accelerate. Bob Peterson, the chief executive of Melton Truck Lines, said he had been feeling the job market’s heat all year, and that he now had no choice but to raise pay for his 1,600 drivers.
Cities where joblessness is 3.5 percent or lower have also witnessed an impressive 4 percent year-over-year increase in earnings, Mr. Shepherdson said.
Bob Peterson, the chief executive of Melton Truck Lines, said he had no choice but to increase pay for his 1,600 drivers this year.
“With unemployment this low, anyone worth their salt has got a job and probably a darn good one,” Mr. Peterson said. Melton operates in 48 states and has offices in five.“With unemployment this low, anyone worth their salt has got a job and probably a darn good one,” Mr. Peterson said. Melton operates in 48 states and has offices in five.
The tight job market has been especially tough on Mr. Peterson, because he requires a drug test for everyone who comes through the door. Many fail, especially after several states legalized marijuana for medical or recreational use.The tight job market has been especially tough on Mr. Peterson, because he requires a drug test for everyone who comes through the door. Many fail, especially after several states legalized marijuana for medical or recreational use.
“There’s guys and gals that like to smoke weed, but they can’t drive a commercial vehicle because it’s prohibited,” Mr. Peterson said. “Some people get here and we find out, oops, they have been smoking or injecting.”“There’s guys and gals that like to smoke weed, but they can’t drive a commercial vehicle because it’s prohibited,” Mr. Peterson said. “Some people get here and we find out, oops, they have been smoking or injecting.”
He says he has to talk to 250 applicants to hire one employee. Mr. Peterson has not given raises in two years, he said, because when he had asked his clients to increase their rates, they threatened to hire another trucking company. He is planning to increase salaries by 10 percent in 2018. Part of the reason, he said, was that he was seeing hiring pick up in the construction business and in manufacturing, two sectors that he competed with for able bodies.
Mr. Peterson has not given out raises in two years, he said, because when he has asked his clients to increase their rates, they have threatened to hire another trucking company. He is planning to increase salaries by 10 percent in 2018. “No one is having an easy time hiring blue-collar workers today,” Mr. Peterson said.
Over the last few months, the industries that have been performing particularly well have been construction and manufacturing — middle-wage, middle-skill sectors that had been lagging. Following a disappointing 2016, manufacturing added a solid 196,000 jobs last year. Construction payrolls increased by 210,000. Mining employers also posted solid gains throughout 2017, bucking a trend of job losses in recent years. Those pressures are bearing down on manufacturing, which added a solid 196,000 jobs last year, and construction, where payrolls increased by 210,000. Mining employers also posted solid gains, bucking a trend of job losses in recent years.
Manual-labor positions are the kinds of jobs that Mr. Trump has promised to bring back in droves, so the uptick could be politically important. The crash in oil prices in 2014 was particularly hard on jobs in the mining sector, which includes support services in oil fields, and had ripple effects on construction and manufacturing, partly because American companies make much of the world’s mining equipment. Oil prices have begun to climb, and that may be one piece of the expansion in all three sectors, economists said.
The crash in oil prices in 2014 was particularly hard on jobs in the mining sector — which includes support services in oil fields — and had ripple effects on construction and manufacturing, partly because American companies make much of the world’s mining equipment. Oil prices have begun to climb, and that may be one piece of the expansion in all three sectors, economists said.
The rest of the world is also in the midst of a strong recovery, helping to drive an American uptick in productive blue-collar work.The rest of the world is also in the midst of a strong recovery, helping to drive an American uptick in productive blue-collar work.
“The manufacturing upturn story is a global story,” Mr. Shepherdson said. “It’s happening everywhere. You can’t take credit for the recovery in Europe and China.”“The manufacturing upturn story is a global story,” Mr. Shepherdson said. “It’s happening everywhere. You can’t take credit for the recovery in Europe and China.”
Retail, on the other hand, finished the year in a slump. The industry — a huge employer across the country — has been struggling to contend with the rise of e-commerce and had a bad month in December, despite the rush of holiday shopping. The sector slashed 67,000 jobs over the year.