On Jan. 8 the newest jobs report was published, with the overall numbers crushing analyst expectations as most had estimated that 200,000 would be created for the month of December. Yet when you look further into the meat of the 292,000 new jobs recorded by the BLS, you find that not only were the majority of them part time (probably holiday seasonal) ones, but average wages for all jobs declined a tick for the first time since 2014.
This is also the first jobs report following the Fed’s hiking of interest rates, and as we saw with Macy’s just a few days ago, it will not be surprising if most retailers layoff many of these part time workers once the end of January comes upon us.
Earlier we gave a big picture explanation how the US can add 292,000 while average hourly wages actually decline. Below is a more nuanced answer, looking at the breakdown of jobs by industry in December. It will probably come as no surprise to anyone that for another consecutive month, the well-paying jobs: mining and logging, wholesale trade, manufacturing, and information barely posted a net increase.
Alternatively, the worst quality jobs continued to soar, pushed higher once again by none other than education and health, where Obamacare was once again instrumental to propel healthcare jobs by a 52,600 surge in December.
The rest was just ugly: temp help soared by 34,400, while waiter and bartenders added another 36,900. The one surprising, and positive outlier: construction jobs – traditionally a well-paid category – soared by 45,000, something very unexpected for the otherwise freezing month of December. This, however, is easily explained by two words: warm weather. As Goldman admits,“Construction employment rose by a firm 45k, a gain we suspect was helped by warm weather. ” This means that in January once the weather effect wears off, all these jobs will be lost and then some.
Finally, employment of “couriers and messengers” gained 15k, likely reflecting seasonal adjustment challenges related to secular growth in online holiday shopping. The flip side: thousands of malls are going empty, and soon to crush the CMBS market.
Temp workers: +34K
Food Services: +37K – Zerohedge
Graphic courtesy of Zerohedge
With China slowing down, and the global economy in recession in many sectors, the trend of part time employment is expected to continue in 2016, with December’s high job print being an anomaly rather than the norm. And when you add in the fact that Small Business deferments for Obamacare ended on Dec. 31 of 2015, it is highly probably that a trend of layoffs and loss of hours will accelerate in the U.S. for the rest of the year.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.