The year’s employment situation didn’t change too much in December as it wrapped up the year similar to the past several months.
Total nonfarm payroll employment rose by 156,000 in December, while the unemployment rate posted little change, moving slightly up to 4.7%, according to the Bureau of Labor Statistics Employment Situation Summary.
“The final jobs report of 2016 was fairly consistent with what we’ve seen over the past few months, showing decent if not spectacular growth and painting a picture of an economy in overall good shape,” said Zillow Chief Economist Svenja Gudell.
Notably, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $26, after edging down by 2 cents in November. Over the year, average hourly earnings have risen by 2.9%.
Gudell expanded on this noting that today’s figure of 2.9% annual wage growth is the fastest pace in more than seven years, which is a positive sign.
Meanwhile, the construction data in the December report looked positive for fixing housing inventory shortages in 2017.
National Association of Realtors Chief Economist Lawrence Yun explained that in real estate, where there is a need for increased home construction and more commercial spaces, the weekly hours worked fell to 38.7 hours.
“The typical hours worked had been 39 for most of 2016 and was 39.6 exactly one year ago. This declining hours imply weak future hiring since existing workers will first be allowed to get in extra hours before adding new hires,” said Yun.
Long term, however, Yun said, “Even with recent slowing month-to-month trends, it is likely construction worker demand will rise quite robustly later in 2017 from both the need to provide more housing units and from an economic stimulus measure that will no doubt include infrastructure spending.”
Coming in above average, the construction wage growth was 3% and will likely accelerate higher.
Overall, Realtor.com chief economist Jonathan Smoke said, “Though job creation slowed according to December’s employment report, we have now seen a record 75 months of job growth. Growth in the labor market is slowing down for the same reason we’re seeing sluggish growth in existing home sales: we have a supply problem.”
“With job openings at near record levels, we can expect further economic growth to lead to higher wages. This growth should lead to higher household incomes and stronger consumer confidence,” he concluded.