–Unemploy Rate Remains on Dntrnd After Rev (8.5% Dec);Earn’gs, Hrs Gain

By Joseph Plocek

WASHINGTON (MNI) – The U.S. December employment report was perhaps
a little on the better-than-expected side of expectations, but there are
still reasons to be concerned that economic growth is not fast enough —
mainly the too-high 8.5% unemployment rate and the fact that about
42,200 of the 200,000 new jobs created in the month appear to be
temporary courier positions.

The December employment report showed monthly payrolls at +200,000
overall but revisions to October-November totaled -8,000 on net,
breaking a recent string of regular up-revisions to prior periods that
skewed about +50,000 to the total in the recent past.

Civilian unemployment fell another 0.2 point to 8.5%, a low since
February 2009. But seasonal adjustments were revised so prior months’
levels changed. The pattern remains that unemployment fell from summer,
with labor force participation steadying and adult male unemployment
still declining in December. The change over the last year was not more
than 0.1 point in any given month after applying the new adjustments.

Private Average Hourly Earnings were unchanged in December for
+1.6% over the year, but hours surged. This implies income and
production rose.

December’s payroll composition included: manufacturing +23,000,
construction +17.000, retail +27,900, finance +2,000, leisure +21,000
(+24,700 in restaurants), health +28,700, and transportation +50,200
(couriers +42,200; the Bureau of Labor Statistics speculated this may
reflect deliveries of on-line purchases). Government was -12,000 as
local employment fell. Private payrolls thus printed +212,000 after
+120,000 in November and +134,000 in October.

The data still indicate too high unemployment but growth appeared
to gain in December due to seasonal spending. An economist at BLS said
there was a caution that January in the last three years has seen at
least some of the Christmas couriers fired. Offhand, we’d say that such
means BLS is due to update to make more accurate its currently
inaccurate seasonal adjustment factors for the Transportation and
Warehousing jobs category.

Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Dec +200k —- +1.61% 102.1 8.5% (8.5108%)
Nov +100k +120k +1.56% 101.6 8.7%r
Oct +112k +100k —— 101.8r 8.9%r

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