Before you get all excited about the 292,000 jobs added in today’s announced December payroll, there is some other data in there that is not quite so celebratory.
(By the way, don’t you have to wonder if the number is fudged? It’s a little suspicious that the high end number predicted was 275K, and yet it edges it out enough to rally a market that has been draining money like water in the bathtub – just the help it needed.)
As Zero Hedge blog sees it:
Not so fast: as usual, the fly in the ointment was a well-familiar one: wages simply did not grow, and with Wall Street expecting a 0.2% increase in average hourly wages, in December not only was there no wage growth, but in fact, average hourly earnings posted a tiny decline from $25.25 to $25.24.
From the report:
The number of unemployed persons, at 7.9 million, was essentially unchanged in December, and the unemployment rate was 5.0 percent for the third month in a row. Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 800,000, respectively…
Employment rose in several industries, including professional and business services, construction, health care, and food services and drinking places.
Construction showed strong job growth for the third consecutive month, gaining 45,000 jobs in December.
In December, health care employment rose by 39,000, with most of the increase occurring in ambulatory health care services (+23,000) and hospitals (+12,000). Job growth in health care averaged 40,000 per month in 2015, compared with 26,000 per month in 2014.
Food services and drinking places added 37,000 jobs in December. In 2015, the industry added 357,000 jobs.
Employment in other major industries, including wholesale trade, retail trade, financial activities, and government, changed little over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in December. The manufacturing workweek edged down by 0.1 hour to 40.6 hours, and factory overtime edged up by 0.1 hour to 3.3 hours.
What caused this? There are three reasons.
First: the continued surge of minimum wage jobs, which shows that in December another 36,900 minimum wage waiters and bartenders were added to the labor force, bringing the total to a new record high of 11.3 million.
Second: a troubling finding from the report was the continued surge in temp-help workers. In fact, as the BLS admitted, while employment in professional and business services increased by 73,000 in December, temporary help services accounting for nearly half, or 34,000, of the gain. Jumping the 34K jump in December brought the number of temp-worker to a new all time high.
Third: the most troubling aspect of today’s jobs report, and perhaps the clearest explanation why there was no wage growth in December, is that the number of multiple job holders soared by 324,000 bringing the total to 7.738 million. This was the highest since August 2008, which as a reminder is the month before the great financial crisis started.
And, as one expert shows, “people need multiple jobs to make ends meet.”
So yes: jobs grew, and yet the BLS itself admits that of the 290,000 job additions, more than all came from 1 worker who had to work 2 or more jobs.
End result: average hourly wages declined from $25.25 to $25.24.