Solid Jobs Gains in December

By at 10 January, 2020, 11:39 am

by Raymond J. Keating-

The employment report for December 2019 – taken in total – released by the U.S. Bureau of Labor Statistics (BLS) showed solid jobs gains overall.

It’s worth noting that the BLS in recent months has highlighted how this report functions:

“This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.”

For years, SBE Council has highlighted how the monthly jobs report works – specifically, which survey generates which data points – and how, therefore, at times, the data in the same month can tell different jobs stories. It’s important to note that the most important jobs statistics are generated from the household survey – that is, labor force and employment numbers – and the household survey tends to better capture startup and small business activity.

Having said this, while the establishment survey for December shows somewhat tepid job gains of 145,000, the household survey showed a bigger increase.

The household survey showed a gain of 209,000 in terms of the labor force, and 267,000 in terms of employment. And those not in the labor force actually fell by 48,000.

As for the labor force participation rate, it has moved up from 62.7 percent in December 2017 to 63.0 percent in December 2018 and 63.2 percent in December 2019. At the same time, the labor force participation rate remains below the pre-recession level that had topped 66 percent.

Meanwhile, the employment-population ratio in December 2019 registered 61.0 percent, and that matched the previous three months. Prior to that, 61 percent had not been seen since late 2008. However, we still remain short of the rate exceeding 63 percent hit during 2006 and 2007.

The labor market trend remains healthy, though given that the economy has been expanding – albeit at an under-performing rate – since mid-2009, there is room to further boost the level of the labor force and the employment rate.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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