Economy adds modest 148,000 jobs in December
Businesses added just 148,000 jobs in December and the unemployment rate stayed unchanged at 4.1 percent, the Labor Department reported on Friday. The figure undershot economists' predictions of about 180,000 jobs added. Hourly earnings continued their modest rise, growing 2.5 percent in December year-over-year.
The jobs report, which marks the 10-year anniversary of the start of the Great Recession, underlines that the labor market has largely recovered from the 2008 economic collapse, with unemployment is at its lowest level since 2000.
Yet those gains haven't diffused across the labor market, leaving hundreds of thousands of workers on the sideline. Muted wage growth has also left experts mystified, given that stronger employer demand for labor is supposed to boost workers' paychecks.
"Surprisingly, there are few indications that the tight labor market is leading to stronger wage growth, a disappointment given that the expansion is now more than eight-and-a-half years old," Stuart Hoffman, senior economic adviser with PNC Financial Services Group, said in a note.
By industry, manufacturing was strong for the second month in a row, adding 25,000 jobs in December after a gain of 31,000 the previous month. Over 2017, the sector gained nearly 200,000 jobs. Construction and food and drinking places also grew robustly, adding 30,000 and 25,000 jobs, respectively. Retail trade lost a seasonally adjusted 20,000 jobs in December and professional and business services added just 19,000.
"It's just striking that you have the service sector not adding as many jobs as you had a few years ago," said Guy Berger, chief economist at LinkedIn. "Some of the fastest growth in hiring has been in ... goods-producing industries."
The year's monthly average of 171,000 new jobs is below the previous year's. "[I]t is, notably, the slowest year for job growth since 2010," Elise Gould, an economist at the Economic Policy Institute, said in a note.
However, lower-paid and less-educated workers are finally making gains after not seeing much improvement in the past few years, with unemployment ticking down slightly for those with only a high school degree, to 4.2 percent.
"The people with less education in the past year or two have made the biggest gains in the labor market," said Jed Kolko, chief economist of Indeed.com, a job-posting site. "To be sure, wages are still higher for people with more education, but the gaps have narrowed slightly."
The unemployment rate for African-Americans fell to 6.8 percent, the first time in 17 years it has been under 7 percent. The rate for white workers was 3.7 percent and 4.9 percent for Latinos.