By CHRISTOPHER S. RUGABER
AP Economics Writer
(AP) — Americans’ paychecks rose in December at the fastest pace in
more than seven years as steady hiring and low unemployment led some
businesses to pay more to attract and keep workers.
added 156,000 jobs, a decent total that shows that moderate hiring
remains sustainable 7½ years after the recovery from the Great Recession
began. The report provided the last major snapshot of the economy
President-elect Donald Trump will inherit from President Barack Obama.
figures also reflect the job market’s vast improvement from the deep
layoffs and surging unemployment rate that prevailed when Obama took
office in January 2009. Last month, the jobless rate was just 4.7
percent, up from a nine-year low of 4.6 percent in November, but far
below the painful 10 percent peak of October 2009. Employers have added
jobs for 75 straight months — the longest streak on record.
so, the job market remains a mixed picture. Hiring slowed last year,
with the economy adding 2.2 million jobs, the smallest full-year gain
since 2012. Job growth averaged 180,000 a month — enough to lower the
unemployment rate over time — but down from 229,000 in 2015.
many people, particularly men without a college education, have suffered
as the job market has shifted away from blue collar work in
manufacturing and mining toward industries that either require higher
skills, like information technology, or that pay less, such as health
care. The proportion of men in their prime working years who either have
a job or are looking for one has continued to drop.
the number of part-time workers who would prefer full-time work, while
declining, remains well above its pre-recession level.
Those weak spots will likely challenge Trump as much as they did his predecessor.
people are back at work than at any point since the recession,” noted
Jed Kolko, chief economist at the job site Indeed. “However, Trump will
inherit an economy that’s riding high but faces long-term challenges.
Fewer adults are at work than before the recession, manufacturing is
lagging despite an uptick in December and the acceleration in wage
growth, while great for workers, could raise inflation fears.”
pay jumped 2.9 percent from a year earlier, a welcome change from the
sluggish wage growth that has been a longstanding weak spot in the
Many companies will likely raise prices to
offset the cost of raises, which in turn would lift inflation. If
inflation accelerates, the Federal Reserve may raise short-term interest
rates at a faster pace this year.
“Pay raises, while good for
workers, represent cost increases for firms,” Andrew Chamberlain, chief
economist at employment website Glassdoor. “The Fed pays attention to
Paul Saginaw, co-founder of Zingerman’s, a mail order food
store and deli based in Ann Arbor, Michigan, says he thinks hiring has
become more competitive in the past several years. The company, which
has 740 permanent employees, is staffing up to open a new restaurant.
Ann Arbor, home of the University of Michigan, “everybody’s hiring most
of the time,” Saginaw said. “It’s an employees’ market right now.”
last month was led by the health care sector, which added 43,000 jobs,
mostly in doctors’ offices and hospitals. Manufacturing resumed hiring
after four months of job cuts, adding 17,000.
Restaurants and bars
gained 30,000 positions. Transportation and warehousing, fueled by
online shopping during the holiday season, added 15,000. On the other
hand, construction and mining companies shed jobs.
A broader gauge
of unemployment, which includes the part-time workers who would like
full-time work as well as people who have stopped looking for jobs,
dipped to 9.2 percent from 9.3 percent. That’s the lowest level since
Though the unemployment rate has returned to its
pre-recession level, the proportion of Americans in their prime working
years who are either working or looking for work remains far below where
it was before the recession began. When people stop looking for a job,
they’re no longer counted as unemployed. Those “dropouts” have
contributed to a declining unemployment rate over the past eight years.
spotlighted that trend as a shortcoming in Obama’s record and charged
during the election campaign that the unemployment rate was a “hoax.” He
now faces the steep challenge of bringing back those who have left the
Since the election, Trump has successfully pressured
several manufacturers to keep some jobs in the United States, including
Ford and United Technologies (NYSE:UTX) ’ air conditioning unit Carrier.
Even so, and despite last month’s increase in factory jobs,
manufacturing employment declined by 45,000 in 2016.
employers, finding qualified software developers, data scientists and
other IT professionals is a top priority. The insurance company
Progressive is stepping up its high-tech hiring to implement its
Snapshot program, which uses a smartphone app and plug-in devices to
track customers’ driving habits. Erin Hendrick, a recruiting manager at
Progressive, says this enables Progressive to customize its premiums.
might not think of technology when you think of an insurance company,”
she says. “But we have a strong need for IT developers, data analysts,
and data scientists.”
Consumers and small businesses have become
more confident since the election, which could lead to increased
spending and hiring. Consumer confidence reached a 15-year high last
And purchases of costly items like homes and cars have been
strong, though they’re threatened by higher interest rates. But if
hiring and wage gains continue, they could offset at least some of the
depressive effects of higher borrowing costs.
Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber
AP Economics Writer Josh Boak contributed to this report.