BLS Releases December 2018 Employment Data (Jan. 2019)
Nonfarm employers posted strong employment growth, adding 312,000 jobs; the unemployment rate rose slightly to 3.9 percent; and hourly wages posted continued growth in December. With an upward revision to the job growth reported for the prior two months, the three-month average was 254,000 jobs, more than the 220,000 average monthly rate for calendar year 2018.
Job gains occurred across a wide range of sectors in December including health care, food services and drinking places, construction, manufacturing, and retail trade. Health care added 50,000 jobs, largely among ambulatory health care services. Employment in food services and drinking places increased by 41,000. Construction added 38,000 jobs, manufacturing added 32,000 jobs, and retail trade added 24,000 jobs in December. Professional and business services with 43,000 jobs added in December, finished 2018 adding 583,000 jobs over the last 12 months. Health care added 346,000 year-over-year. Both continued to be the biggest drivers of job growth; with solid gains over the year also coming from manufacturing (284,000) and construction (280,000).
Despite strong nonfarm jobs growth, the unemployment rate increased to 3.9 percent in December, from 3.7 percent in November, as the strong labor market conditions pulled more people into the labor market. During the month, the labor force participation rate rose by 0.2 percentage points. The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs) remained unchanged in December at 60.6, a high for the recovery.
The tighter labor market is showing some dividends in wage growth. The average hourly wage is up 3.2 percent over the last year; over the last three months (October, November, and December), the annualized rate was up 3.2 percent. With the core rate of inflation at 2.2 percent, increased hourly wages translate to modest real wage gains.
In sum, this is mostly a positive jobs report. The pace of job growth that began seven years ago is continuing, with the economy adding a total of 2.6 million jobs during 2018. This growth rate is pulling more workers into the labor market, which is now tight enough to produce real wage gains.
The full BLS press release on the December 2018 employment situation can be accessed in the pdf below:
The next employment situation report for January 2019 will be released on Friday, February 1, 2019.