Last Friday brought the final jobs report of the year and of President Obama’s tenure. While the headline number of 156,000 new jobs was below analysts’ expectations, this was hardly a negative report. The most exciting news came from wages which increased by 2.9 percent - the largest year-over-year wage growth we’ve seen since 2009. Average hours remained steady, while the labor force participation rate rose to 62.7 percent. November’s job gains were also revised to show an additional 19,000 jobs compared to last month’s initial report.
The industry breakdown was a mixed bag. In the goods-producing sector, manufacturing rebounded to add 17,000 jobs while we saw a small decreases in construction and mining and logging. Private service-providing job growth slowed, but still contributed 132,000 new jobs. This is largely due to the robust education and health services sectors which accounted for over half of the new openings for the month.
We saw a downturn in our space with a decrease of 15,500 temporary positions in December, but it’s important to note that numbers are still up when compared to last year. Revisions to the November jobs report also showed an additional 7,400 contract roles. “2016 went out with a bit of a whimper for temporary help as employment declined and the year-over-year growth rate fell back below 1 percent in December, though the upward revision to November improves the picture somewhat,” shared Andrew Braswell CCWP, senior research analyst at Staffing Industry Analysts.
The unemployment rate below 5 percent and the stagnant labor force participation rate reveal some interesting implications. This points to the fact that companies are having a harder time finding and retaining talent while individuals outside the workforce are having trouble work. Whether that’s because they can’t find roles that match their skillset or are too discouraged to even look is unknown. If these two factors continue, we may start to see wage growth consistently around 3 percent in 2017 as businesses will need to offer higher wages in order to keep their existing workers and attract new ones.