The economy created 148,000 jobs in December, much lower than the year to date monthly average of 171,000. The total number of seasonally adjusted (SA), non-farm people employed in the U.S. in December was 147.380 million (M), an increase of 0.10% month on month, (m/m). Over the past 12 months the U.S. economy has added 2.055M, lower than the 2.179M jobs added in 2016.
The headline, (U3) SA unemployment rate was unchanged at to 4.1% in December as the number of unemployed persons was essentially unchanged at 6.6 million. Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 926,000, respectively. The SA, U6 unemployment rate, (includes discouraged and other marginally attached workers plus part-time workers that would prefer to work full time) moved up 0.1 percentage point to 8.1%.
The SA service providing sector employed 127.121M people in December, up 55,000 jobs, 0.07% m/m and 1.590M, 1.3% y/y. Service providing employment in December accounting for 86.3% of the non-farm workforce. The big employers were education and health services with 23.3M, government with 22.3M, retail with 15.8M, leisure and hospitality with16.1M and financial services with 8.5M.
The SA goods producing sector employed 20.259M people in December, up 55,000, (+0.27%), m/m and up by 465,000 or 2.3% y/y.
Figure 1 shows manufacturing and construction employment on the same chart from 2005 to present. Both manufacturing and construction employment are showing growth, construction is growing at a faster rate on a percentage basis.
The SA manufacturing sector employed 12.539M in December, up 25,000 or 0.46%, m/m and higher by 196,000 (1.6%), y/y. The two largest employment categories within manufacturing are motor vehicles and parts and transportation equipment. There were 941,500 employed in the manufacture of motor vehicles and parts, up 1,000 m/m, +0.14%. On a y/y measure, jobs in this sector were lower by 1,000 or -0.10%. The transportation equipment field employed 1.617M. Jobs in this sector were up by 1,000, +0.06% m/m but were down by 3,000, -0.18% y/y.
The construction sector employed a total of 6.993M, up 30,000, (0.35%), m/m and up by 210,000, (2.7%), y/y. Most construction workers are employed constructing buildings. In December there were 1.550M workers constructing buildings, up 7,000, 0.45% m/m and up 48,000, 3.2% y/y. Heavy civil engineering was the next largest construction segment employing 957,900 in December, down 5,000, -0.52% m/m but higher by 23,000, 2.5% y/y. Highway, streets and bridge construction employed 346,600, down 24,400, 6.6% and higher by 4,000, 1.1% y/y. Industrial building construction employed 176,900, higher no change m/m and stronger by 14,000, +0.7% y/y. Commercial building construction jobs declined by 3,800 m/m, -0.6% to 600,900 workers m/m. On a y/y basis commercial construction jobs increased by 12,000, a 2.1% gain.
Figure 2, show the SA history of oil and gas extraction employment from 2010 to present. In 2010 employment is this sector averaged 159,000 for the year. By 2014, employment had increased to an average of 198,000 for the year as oil topped-out at $105 per barrel of WTI. By July of 2016, employment in the oil field bottom-out at 172,000 as the price of oil cratered reaching a low of $29 per barrel. Employment bounced back to the 178,000 level towards the end of 2016 and has stayed in a narrow range since then despite the recent surge in the price of oil, which pended the year at $62 per barrel.
At Gerdau, we keep a keen eye on the employment numbers, especially manufacturing and construction since this is where most long product steel ends-up. In addition we know that growth in net job creation correlates to increased steel consumption.