December Jobs Report: Three Big Takeaways For The US Economy

December’s jobs report rounded out 2015 with a bang. Among Wall Street analysts, the consensus was the economy would add some 200,000 jobs in the last month of 2015. In reality, payrolls grew by a better-than-expected 292,000 last month, and although the unemployment rate held steady at 5 percent, labor force participation ticked up by a tenthHigh of a percentage point.

So there are reasons to cheer Friday's jobs report, but it's not all roses. Digging deeper, here are three key themes that emerged in the report.

1. Mining Jobs Are Still Getting Slammed

The slide in oil and commodities prices that began in late 2014 hasn’t abated. The price of crude oil fell 30 percent in 2015, slamming the brakes on the runaway job gains from the shale oil boom of the past decade.

A total of 129,000 mining jobs were lost in 2015, with more than 40,000 positions evaporating in December alone.

Manufacturing has also felt a chill wind from the global economy, as slowing growth in China and Europe dries up foreign demand. A stronger dollar, meanwhile, has made exports less attractive to the global market.

That double whammy weighed heavily on makers of transportation equipment, machinery and metal products in December. In all, the durable goods manufacturers shed 6,000 jobs in December, losses partly offset by gains in the appliances and wood products industries.

With oil still falling in the first week of 2016 and the dollar gaining ground against the Chinese yuan, these patterns don’t look likely to end anytime soon.

2. Wage Growth Hasn’t Left the Runway

Economists on the lookout for signs of wage growth in the economy will have to wait. Despite adding nearly 50 percent more jobs than analysts expected in December, employers in most industries left wages virtually stagnant.

Analysts at Deutsche Bank called the wage data “a modest weak spot” in the report. Though year-over-year gains came in at a decent 2.5 percent, they got an artificial boost from an unusually low reading in December 2014. In the aggregate, average hourly earnings fell 1 cent to $25.24.

“We note that there was no change in average hourly earnings after a long string of 0.2 percent [month-over-month] increases,” said ITG Chief Economist Steve Blitz in a note released after the report. Economists are hoping to see month-to-month gains edging closer to 0.3 percent to indicate strong wage growth.

Federal Reserve policymakers will be especially attuned to wage figures in coming months as they mull raising the benchmark interest rate further after December’s rate hike. According to the Fed’s economic model, rising wages are intertwined with a quickening pace of inflation. But both measures have lagged behind a level that the Fed would consider healthy enough to tighten monetary policy.

3. Health, Services Jobs Surge

Roughly half of the jobs growth in December came from relatively low-paid sectors: health services, temp work, food services and couriers. And as Blitz points out, some of the gains — particularly construction workers employed through a bizarrely warm December — are “seasonal mis-adjustments” that are liable to reverse in coming months.

Particularly vulnerable are couriers, a segment of the workforce that includes short-distance delivery drivers and messengers. It added 15,000 jobs in December and 11,000 jobs in November. Those gains likely reflect hiring for internet deliveries around the holiday season.

In total, 2015 saw job growth in the services sector soar to 15 times as much as in the goods-producing sector, which includes mining and manufacturing jobs. Employment gains in the health sector were particularly robust, with an average 40,000 jobs added per month in 2015, compared with 26,000 a month in 2014.

Those kinds of jobs are set to become more plentiful as America’s population grows grayer. Recent projections from the Bureau of Labor Statistics show the fastest-growing fields in the coming decade to be personal care aides, registered nurses and home health aides. Food preparers and retail workers round out the top five.