In December, the economy created 157,000 jobs, about 20,000 less than Wall Street analysts predicted. Of those 156,000 jobs, 41,000 were part-time. A record 95.1 million people are not in the labor market, an 18,000 increase from the last month, and an astronomical 841,000 bump over the last three months. The unemployment and labor participation rates remained mostly unchanged, 4.7 percent and 62.7 percent, respectively.
As always, economists look for the silver lining, and the 10 cents an hour average wage increase to $26.00 gave them something to crow about. But as I have noted before, that’s the average increase which would include the $10 million bonus check that the Park Avenue investment banker deposited just before Christmas. As the Economic Policy Institute noted, from 1978 to 2015, Chief Executive Officer compensation grew 941 percent compared to a typical worker’s 10 percent increase.
|December turns in last ho-hum BLS report from Obama Administration.|
Similar to earlier months in 2016, health care was strong, plus 43,000, with 20,000 of those jobs in ambulatory services. Predictably during the Christmas season, food and beverage jobs additions were strong, plus 30,000. Social assistance jobs were also a big December winner, plus 20,000. Manufacturing, a better paying sector, was plus 17,000 for December, but down overall by 63,000 for 2016. In all, December’s BLS is a microcosm of earlier cold oatmeal served up in job reports during the Obama administration.
The situation is looking up though if President-elect Trump keeps his promise to bring jobs back to America. The approach that’s been communicated from the incoming administration is two-fold. First, reduce immigration. Second, pressure American companies to keep manufacturing in the United States.
The Pew Research Center estimates that about 8.3 million illegal immigrants hold jobs, many that Americans would eagerly do in construction, manufacturing and the service industry. Legal immigrants are employment-authorized, and adding them to the labor pool at an average of about 1 million annually hurts Americans.
Trump is increasingly aggressive about jawboning American manufacturers to stay in the U.S. Just a day before the December BLS report, Stanley Black and Decker announced that it would open a $35 million plant in the U.S. to “re-Americanize” its Craftsman tool brand. Trump’s pledge to heavily tax products made outside the U.S. before they could enter the country convinced the General Motors’ Chief Executive Officer and many others that the President-elect is serious about making America great again.
“Make in U.S.A. or pay big border tax,” a Trump tweet, is a message that economists and businesses expect to hear over and again during 2017.