December Sees Uptick in Private Sector Jobs, Though Slightly Under Predictions
December saw a promising shift in the private sector job market, as job creation once again became positive. The increase, however, was slightly less than anticipated. A total of 41,000 new jobs were added in this period, a welcome change from November's 29,000 job loss.
This positive turn in the job market was a much-needed boost as the year came to an end, especially considering that the private sector had seen a decline in new jobs in three out of the four months leading up to December.
The final count of 41,000 new jobs fell short of the predicted 48,000, but nonetheless signaled an upward trend.
Sector-Wise Job Growth
The increase in payroll was primarily seen in the service sector. Education and health-related fields witnessed the addition of 39,000 jobs, while the leisure and hospitality sector contributed with 24,000 new positions. The trade, transportation, and utilities sectors collectively added 11,000 jobs, and the financial services sector saw an increase of 6,000 jobs.
In contrast to the job gains, professional and business services saw a decrease of 29,000 jobs, and the information services sector lost 12,000 positions.
Industries producing goods saw a decrease of 3,000 jobs, chiefly due to a reduction of 5,000 jobs in the manufacturing sector.
Job Growth Across Different Sized Firms
Interestingly, nearly all the job gains were in companies that employed fewer than 500 workers. Larger firms only added a paltry 2,000 jobs.
Small businesses bounced back from the November job losses, ending the year on a positive note, while larger companies seemed to hold back on hiring.
In a revision, the total number of jobs lost in November was adjusted from the previous estimate of 32,000.
Wage Growth Remains Steady
Despite the overall positive trend in job growth, wage gains remained steady. Employees who retained their jobs saw an average annual wage increase of 4.4%, which is the same as the previous month. Those who switched jobs saw a wage increase of 6.6%, which is a slight 0.3 percentage point improvement from the month before.
Looking Ahead
This report is a precursor to the more comprehensive nonfarm payrolls count, which was delayed due to a government shutdown. This will be the first time the report will be released on schedule since the issue was resolved.
According to predictions, 73,000 new jobs are expected for the upcoming month, up from 64,000 in the previous month. The unemployment rate is projected to decrease slightly to 4.5%.