The Bureau of Labor Statistics of the Labor Department issued its monthly Employment Situation this morning at 8:30 est.
According to the release, the economy gained 156,000 new jobs in December, more than enough to absorb new entrants into the workforce. Revisions to October figures were -7,000 jobs, to November’s, +26,000, meaning the net revision to the prior two months’ data was +19,000 new positions.
While this is a so-so result, we should consider how much may be due to random statistical variations in the data and, more importantly, how much comes from the difficulty employers are apparently having in finding qualified candidates who are currently unemployed.
More evidence that the latter is becoming a more significant issue comes from the rising trend in average hourly wages the BLS is also reporting. for the 12 months ending in December, wages have been increasing at an inflation-beating 2.9% rate. If we, methodologically incorrectly, take the December wage gains alone, the year on year increase is 4.6%.
The bottom line: good news, and evidence the Fed will likely take as prompting it to raise the Fed Funds rate again sooner rather than later.
I believe average hourly earnings reflect such variable factors as premium pay for
overtime and late-shift work. They also reflect shifts in the number of employees between relatively high-paid and low-paid work. My conclusion: not the best stat for measuring inflation pressures – if a college grad finally finds work in his/her field, average hourly earnings go up.