US economy adds 145,000 jobs in final report of 2019

Andrew Cummings
January 14, 2020

Analysts in a Reuters poll had forecast a gain of 25,000 jobs in December and an unemployment rate of 5.8%. That reflects strong growth in recent years in fields such as healthcare and hospitality, where women work in larger numbers, and likely reflects the future of the American workforce. The employment-population ratio was 61% percent for the fourth consecutive month but was up by 0.4 percentage point over the year.

"We are starting the year 2020 very well", said Gus Faucher, chief economist at PNC Financial Services. "We should see continued economic expansion throughout 2020 driven by consumers".

Annual revisions to the unemployment rate showed no change to previously reported figures in 2019. Hourly wages have increased by 2.9% over the past year, missing the expected target of 3.1%, and marking the first time since July 2018 that wage gains have fallen below 3% year-over-year. There is the potential that wages jumped in January as many states adjusted their minimum wages.

In December, 1.2 million persons were marginally attached to the labor force, down by 310,000 from a year earlier.

"As would-be workers become scarcer, we would expect employers to have to work harder to attract and retain the workers they want", says Elise Gould, senior economist with the nonpartisan Economic Policy Institute.

"We gave all of our front-line employees a 10% or 11% raise because of the fear we have about the wage pressures in the economy", said CEO Chris Kenny. "We can not achieve our business goal without great employees".

Job creation declined 24% previous year with the monthly average of new hires falling to 176,000 from 233,000 in 2018. Federal Reserve policy makers are likely to keep holding interest rates steady after cutting three times in 2019 to insure against risks from trade-policy uncertainty and sluggish global growth, though further weakness could raise concerns about the durability of the record-long USA expansion. Retail sales during the crucial holiday shopping improved 3.4% compared to the prior year, according to Mastercard SpendingPulse.

Private sector payrolls rose by 139,000 in December. Notable job gains occurred in retail trade and health care, while mining lost jobs. Peter Tchir, head of macro strategy for Academy Securities, called this "the one impressive number" in Friday's report. For "all jobs" (and including supervisors) in December, wages rose +2.9% y/y hourly and +2.3% y/y weekly. Late last year, the 30-year-old took a job guiding jets as a ramp agent for Alaska Airlines at Seattle's worldwide airport. Security problems at Boeing also affected orders for aircraft and spare parts.

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