The year ended on a high note with a very positive jobs report and another drop in the unemployment rate. More than a quarter of a million jobs were added in December, and the unemployment rate dipped to 5.6%.
Monthly employment change chart courtesy of U.S. BLS.
The numbers kept the economy on the way to recovery and followed strong numbers from the previous months reported by the U.S. Bureau of Labor Statistics (BLS). December was originally predicted to add 240,000 jobs, according to economists. However, the final month of the year added 252,000 jobs. October and November’s job gains also surpassed expectations. The BLS later revised November’s expected 321,000 added jobs to 353,000 and raised October’s new jobs 18,000 to 261,000. In all, annual employment jumped 2.9 million, the biggest gain since 1999.
The months of 2014 averaged 246,000 new jobs gained, 52,000 higher than the 2013 monthly average of 194,000 jobs. The BLS reported only January 2014 had fewer than 200,000 jobs added. Several sectors finished 2014 with positive gains: construction added 48,000 jobs, food services and drinking places added 44,000 jobs, and healthcare added 34,000 jobs. The uptick in construction jobs was one more sign that the housing market that had struggled for so many years is finally making strong improvements. Home prices rose as mortgage rates stayed low, with 30-year, fixed rates below 4%. That will not likely last through this year, but it’s not certain when rates will reverse course.
Unemployment rate chart courtesy of U.S. BLS.
The jobs report was coupled with news of a lower than expected unemployment rate at 5.6%. It’s the lowest level since the start of the recession and a solid drop from November’s 5.8% rate. However, all of the news of more jobs, a better housing market, and a lower unemployment rate was dampened by one statistic: wages for most Americans did not see a large increase.
Average hourly earnings dipped five cents during the month of December to $24.57. Over the course of the year, average wages increased just 1.7% since 2013. It’s one reason why many Americans will say they haven’t felt the improvement of the economy on a personal level. However, as we mentioned in a previous blog post, almost two dozen states are raising their minimum wage. Next year the wage growth should be more significant.
Overall, it was good news for 2014 and a solid way to kick off the new year. Will 2015 be the year the economy rebounds in every aspect? Leave your thoughts in the comments.
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