December Jobs Report: I Told You So - Jobs Actually Declined In December

Important: There was a huge amount of seasonality in this report. This is common for December, but the issue was greatly exacerbated because of the outsized impact of the pandemic. Take the large changes in some of the data with many grains of salt.

I have been warning for almost 4 weeks that the December employment report might have a negative number. It did. At the same time, the internals are not nearly so bad as the headline.

HEADLINES:

  • -140,000 million jobs lost, 95,000 of which were in the private sector and 55,000 were in government. Comparatively, there were 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report indicated a gain of 21,000 jobs, which factors into the unemployment and underemployment rates below.
  • U3 unemployment rate was unchanged at 6.7%, compared with the January low of 3.5%.
  • U6 underemployment rate fell -0.3% from 12.0% to 11.7%, compared with the January low of 6.9%.
  • Those on temporary layoff increased 277,000 to 3,039,000.
  • Permanent job losers decreased by -348,000 to 3,370,000.
  • October was revised upward by 44,000. November was also revised upward by 95,000 respectively, for a net gain of 135,000 jobs compared with previous reports.

Leading employment indicators of a slowdown or recession

I am still highlighting these because of their leading nature for the economy overall.  These were generally positive: 

  • the average manufacturing workweek was unchanged at 40.2 hours. This is one of the 10 components of the LEI.
  • Manufacturing jobs increased by 38,000. Manufacturing has still lost -543,000  jobs in the past 10 months, or -4.2% of the total. About 60% of the total loss of 10.6% has been regained.
  • Construction jobs increased by 51,000. Even so, in the past 10 months -226,000 construction jobs have been lost, -30% of the total. About 80% of the worst loss of 15.2% loss has been regained.
  • Residential construction jobs, which are even more leading, rose by 8,900. Since February there have now been actual job *gains,* to the tune of 6,400 jobs, to a new 10 year+ high.
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Disclaimer: This blog contains opinions and observations. It is not professional advice in any way, shape or form and should not be construed that way. In other words, buyer beware.

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