Complete Jobs Report 2014

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Job report of December 2014 is out and the data is quite encouraging for the economy. Several analysts’ predicted 240,000 job growth in December. However, according to the Labor Department, 252,000 jobs were added last month.

Notes: All Employees: Total Nonfarm, commonly known as Total Nonfarm Payroll, is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed. This measure accounts for approximately 80 percent of the workers who contribute to Gross Domestic Product (GDP). This measure provides useful insights into the current economic situation because it can represent the number of jobs added or lost in an economy. Increases in employment might indicate that businesses are hiring which might also suggest that businesses are growing. Additionally, those who are newly employed have increased their personal incomes, which means (all else constant) their disposable incomes have also increased, thus fostering further economic expansion. Generally, the U.S. labor force and levels of employment and unemployment are subject to fluctuations due to seasonal changes in weather, major holidays, and the opening and closing of schools. The Bureau of Labor Statistics (BLS) adjusts the data to offset the seasonal effects to show non-seasonal changes: for example, women’s participation in the labor force; or a general decline in the number of employees, a possible indication of a downturn in the economy. To closely examine seasonal and non-seasonal changes, the BLS releases two monthly statistical measures: the seasonally adjusted All Employees: Total Nonfarm (PAYEMS) and All Employees: Total Nonfarm (PAYNSA), which is not seasonally adjusted.

Unemployment Rate in December

The employment rate has declined by 0.2 percent from November’s 5.8 percent and stopped at 5.6 percent last month. In comparison to last year’s rate, which was 6.7%, the present rate is  encouraging.

The unemployment rate for people who were not encouraged or stopped searching for work is 6%. For people who wanted to work but have not looked in recent times, the rate I 6.9%. The part time workers who wanted to get involved in full time job, the rate stands at 11.2%, which has declined from last year’s 13.1%.

Notes:Civilian Unemployment Rate Notes: The unemployment rate represents the number of unemployed as a percentage of the labor force. Labor force data are restricted to people 16 years of age and older, who currently reside in 1 of the 50 states or the District of Columbia, who do not reside in institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces. This rate is also defined as the U-3 measure of labor  underutilization.

Wage Rate in December

With 353,000 jobs added in November, it was quite a robust rise in comparison to the jobs created last month. In addition, the average earning of private sector was $24.57, which is five cents less than November’s rise of six cents.

Thus, the report shows only a little improvement. Though there was a drop in the rate of unemployment, wage earnings weakened in December. The hourly wage rate for private sector employees increased 1.7% last month from last year’s data. The rise of average weekly earnings in comparison to the previous year is 2.5%.

December Job Report for Different Sectors

Employment increased in specific industries. Here is what the job report says

Professional and business services- Average monthly job gains in 2014 stands at 61,000. The sector added 52,000 jobs last month.

Healthcare and employment- Added 34,000 jobs in December where the monthly average of growth in 2014 was 26,000. The rise of jobs last month is impressive.

Construction and Employment- The sector created 48,000 jobs last month, which is quite high considering the performance in last few months.

Manufacturing and employment- The monthly average jobs created in this sector was 16,000 in 2014. In December, 17,000 jobs were added, which slows marginal growth from monthly average.

Wholesale trade and financial activities- The trend of creating new jobs was escalating in December. However, a little change was noticed in other sectors such as transportation and warehousing, government, information, mining and logging and retail trade.

Notes:Total Nonfarm Payroll Notes: All Employees: Total Nonfarm, commonly known as Total Nonfarm Payroll, is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed. This measure accounts for approximately 80 percent of the workers who contribute to Gross Domestic Product (GDP). This measure provides useful insights into the current economic situation because it can represent the number of jobs added or lost in an economy. Increases in employment might indicate that businesses are hiring which might also suggest that businesses are growing. Additionally, those who are newly employed have increased their personal incomes, which means (all else constant) their disposable incomes have also increased, thus fostering further economic expansion. Generally, the U.S. labor force and levels of employment and unemployment are subject to fluctuations due to seasonal changes in weather, major holidays, and the opening and closing of schools. The Bureau of Labor Statistics (BLS) adjusts the data to offset the seasonal effects to show non-seasonal changes: for example, women’s participation in the labor force; or a general decline in the number of employees, a possible indication of a downturn in the economy. To closely examine seasonal and non-seasonal changes, the BLS releases two monthly statistical measures: the seasonally adjusted All Employees: Total Nonfarm (PAYEMS) and All Employees: Total Nonfarm (PAYNSA), which is not seasonally adjusted.

Initial Unemployment Claims Data

Initial Unemployment Claims

Average Duration of Unemployment

 

Average Duration of Unemployment (Weeks)

Positive Signs for Economy

National Retail Federation’s chief economists Jack Kleinhenz informed that December’s job report is again quite strong and showing positive signs of economic performance and maturing labor market.

In 2014, ten out of twelve months have seen 200,000 jobs added and December’s 252,000 positions were quite strong. The job gain estimate for October and November was even revised by the government and it was revealed that employers created 50,000+ jobs than what previously expected. However, the wages are still red flags for the workers in the US. With slight decline of hourly average wage in December, the sight of acceleration is still not visible, which is a concern, revealed some economists.

In addition, people who are out of jobs for more than 27 weeks still do not have much respite. With 2.8 million long term unemployed people in America, the slight decline of 1.1 million over last year is still much higher than normal.

Overall, the trend of new job creation was excellent in 2014 where 2.95 million jobs were added, which is the best figure in last 15 years. The rate of unemployment was almost 7% and it fell less than 6% in 2014, which is again highest decline since 1984. Many analysts are predicting that considering the current pace of job growth, it can be expected that by early 2016, the economy will be back and the day is not far when the economy will be fully recovered from 2007-2009’s Great Recession.

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