The December jobs report was stronger than expected. However, details are concerning. 
Please consider the BLS Employment Report for December.
Jobs vs Employment
From September 2020 through early 2022, nonfarm payroll job gains and full time employment changes tracked together.
Starting around March of 2022, a divergence between employment and jobs became very noticeable, and I have been discussing the divergence since then.
Job Stats vs One Year Ago
- Nonfarm Payrolls: +2,232,000
- Employment: +537,000
- Full Time Employment: +434,000
The economy is adding jobs, but employment growth is part time.
Job Stats vs 3 Years Ago
- Nonfarm Payrolls: +8,166,000
- Employment: +2,232,000
- Full Time Employment: +937,000
Over 8.1 million nonfarm payrolls but full-time employment is only 937,000.
Job Report Details
- Nonfarm Payroll: +256000 to 159,536,000 – Establishment Survey
- Civilian Non-institutional Population: +175,000 to 269,738,000
- Civilian Labor Force:+243,000 to 168,547,000 – Household Survey
- Participation Rate: +0.0 to 62.5% – Household Survey
- Employment: +478,000 to 161,661,000 – Household Survey
- Unemployment: -235,000 to 6,886,000 – Household Survey
- Baseline Unemployment Rate: -0.1 to 4.1% – Household Survey
- Not in Labor Force: -68,000 to 101,091 – Household Survey
- U-6 unemployment: -0.2 to 7.5% – Household Survey
Nonfarm Payrolls Change by Sector 2024 vs 2023
Nonfarm Payrolls Change in December
- Private Education and Health Services: +80,000
- Government: +33,000
- Retail trade: +43,000
- Construction: 8,000
- Manufacturing: -13,000
- Wholesale Trade: -4,000
- Retail Trade: +43,000
- Financial Activities: +13,000
- Professional and Business Services: +28,000
- Leisure and Hospitality: +43,000
Education, Health Services, and Government added 113,000 jobs in December. I suspect retail trade was a seasonal anomaly.
Monthly Change in Nonfarm Payrolls
Monthly Revisions
- The change in total nonfarm payroll employment for October was revised up by 7,000, from +36,000 to +43,000.
- The change for November was revised down by 15,000, from +227,000 to+212,000.
- With these revisions, employment in October and November combined is 8,000 lower than previously reported.
Part-Time Jobs
- Involuntary Part-Time Work: -111,000 to 4,358,000
- Voluntary Part-Time Work: +134,000 to 22,514,000
- Total Full-Time Work: +87,000 to 133,510,000
- Total Part-Time Work: +247,000 to 27,918,000
- Multiple Job Holders: -99,000 to 8,478,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.
Note that multiple job holders add to nonfarm payrolls but not the number of employed.
Hours and Wages
This data is frequently revised.
- Average weekly hours of all private employees was flat at 34.3 hours.
- Average weekly hours of all private service-providing employees was flat at 33.2 hours.
- Average weekly hours of manufacturers dropped 0.1 hour to 40.0 hours.
An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 160 million, it’s more significant than it appears at first glance.
Hourly Earnings
This data is also frequently revised. Here are the numbers as reported this month.
Average Hourly Earnings of All Nonfarm Workers rose $0.10 to $35.69. A year ago the average wage was $34.34. That’s a gain of 3.9%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.06 to $30.62. A year ago the average wage was $29.51. That’s a gain of 3.8%.
Year-over-year gains have been trending lower.
Unemployment Rate
The unemployment rate has been in a holding patter of 4.1 percent or 4.3 percent for six consecutive months.
Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
- The official unemployment rate is 4.1 percent.
- U-6 is much higher at 7.5 percent.
Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.
The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report.
The birth-death model pertains to the birth and death of corporations not individuals except by implication.
For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.
Birth-Death Methodology Explained
I gave a detailed explanation of the model and why the hype is wrong in my June 8, 2024 post How Much Did the BLS Birth-Death Adjustment Pad the May Jobs Report?
I repeat, do not subtract the birth-death number from the headline number. That’s flawed.
However, it is now clear that the BLS is too optimistic about the number of jobs they believe are being created by the net creation of new businesses.
A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
On August 22, 2024 I gave A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
Those negative revisions are a direct result of the BLS Birth-Death model gone haywire.
Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
On November 20, I commented Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
Hard evidence from QCEW report suggests more negative revisions coming for BLS nonfarm payroll report.
Household Survey vs. Payroll Survey
- The payroll survey (sometimes called the establishment survey) is the headline jobs number. It is based on employer reporting.
- The household survey is a phone survey conducted by the BLS. It measures employment, unemployment and other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.
Synopsis
This was a stronger than expected report but full-time employment has been weak for three consecutive years.
Nonfarm Payrolls are up +8,166,000 from three years ago, but employment is only up +2,232,000. Full-time employment is only up, 937,000.
Since the peak in June of 2023, full-time employment is down by 258,000.
The QCEW reports continually show that jobs are overstated. The strength we do see is suspect.
And still no analyst is factoring in the massive numbers of excess deaths and disabilities in working age Americans….
Caused by the Covid Vaccines.
Rendering these job reports … worse than useless
Cowards
“Not in Labor Force: -68,000 to 101,091”
To clarify for readers, that is 101,091,000 Not in Labor Force.
The report is always headlines, the retraction or readjustment is always fine print a month later. I’ve seen this movie before, like perhaps the last 4 years…
Mish, are you going to offer up your own predictions/forecasts for how the BLS household survey employment numbers may be revised with the new Census population estimates? https://www.census.gov/newsroom/press-releases/2024/population-estimates-international-migration.html
I think the BLS revisions will come out early next month
Let the record show that Biden handed an okay economy off to Trump. Nothing spectacular but not a recession like Republican presidents that handed off a dumpster fire to their Democratic successor in 2009 and 2021.
Hey, Trump pulled out all of the stops to keep the 2021 dumpster fire for himself…
but the record won’t reflect that…
being the modest man that he is: preferring to work behind the scenes.
Not really an “OK economy” when it’s entirely propped up by an ongoing government annual deficit of 6.4% of GDP. The economy has been on life support throughout Biden’s administration using unprecedented levels of borrowing. It’s unsustainable.
Not that he had any chance in 2028 because people are disgusted by CA politics but it seems it’s time to call this what it is. Newsome’s Katrina.
Excellent. Distract from this uncomfortable topic. You’re a good minion, have a pat on the head.
You can clearly see from the Monthly Change in Nonfarm Payrolls that the labor market had normalized by Feb ’23. For now at least, the labor market is on solid footing as we start ’25. 1st-time unemployment claims just dipped to 201K which is a very low number.
Like any red-blooded American, I can only ponder how strong our country would be if our immigration policy shifted towards forcing illegals to come out of the shadows, we slowly started replacing them with able-bodied Americans in residential construction & home repair services, and slowly started drawing down H1-B & related visas?
The Biden juggernaut economy is coming to an end in 10 days when the new circus pitches their tent.
Next up: tariffs, labor shortages, market chaos, distrust, bullying, and more inflation.
Picked up more shares of TLT today. 30 year bond at 5% and 20 year not that far behind. Money train at the station, time to get on.
Um, deporting criminals & people with deportation notices isn’t going to cause labor shortages. And just as a thought experiment, if Trump’s plans were to really gain traction, how would deporting 90% of the illegals living off government assistance in NYC, Chicago, etc be a bad thing?
And as for the looming stock market chaos, it will, as you well know, have everything to do with inflationary pressures that are already baked into the system from $36T in debt, the Fed ending QE & possibly starting up QT again to cover the $7T in debt that matures in the next 12 months.
It’s quite possible that Trump will be forced to back down from large, broad-based tariffs. A 10% tariff on everything coming in from China isn’t going to cause runaway inflation. Fortunately, we’ll know more about all that in the next 30 days or so.
“And just as a thought experiment, if Trump’s plans were to really gain traction, how would deporting 90% of the illegals living off government assistance in NYC, Chicago, etc be a bad thing?”
The problem with your thoughts is that they stop after 30 seconds of impulsive heaving. Those “illegals” living off “socialism” will only do so for a limited time. They are here to work and a better life, the only thing preventing them from working are arcane laws and restrictive immigration policy. Give them a chance to work and they’ll take it and happy to be off of social services.
The “pet eating people” from Haiti are a great example if you’ve studied their thriving community. The only areas I see thriving are ethnic neighborhoods whether it’s china town, little mexico, or little middle east or little india. everything else is dead.
So the point is deporting 1m people today means you’ve deported a potential 10m people because they are also the ones having kids. I’m pretty sure you’re not.
“They are here to work and a better life,” in the drug trade, at least going by what I see locally.
Thank goodness Trump is president & not you.
I don’t care about the declining birth rate. The world could probably benefit from fewer people. Once AI & robotics start to destroy jobs, the world won’t need 8 billion people.
… and the Golden Age shall begin (for me)! Celebrate, my minions… your glorious leader is about to ascend!
I know you are just trolling and its cute but the American people were just asked this very question. Not even referring to the massive election rejection. Here; from the AP no less who felates any and all Democrats. Ugh
https://apnorc.org/projects/bidens-legacy-as-president/
okay so Biden was a bad president, it’s over now. Let’s not waste time talking about how bad Biden was anymore because it will change absolutely nothing.
Trump is the new king so he owns all of it and if he’s just going to be making excuses because of Biden then he’s totally useless and need to move on to the next clown.
He absolutely is not. I am.
Wait for the coming debt crisis and you may be able to buy TLT cheaper.
I buy on dips and sell calls to lower my cost even more. If it rallies and I get called away well I keep the profits either way. It’s a great hedge against chaos.
Over inflated payroll numbers. Biden’s only legacy.
Bidens legacy is the same as Obamas. Trump is both of their legacies.
If you are so convinced the numbers are inflated and false (hubris, anyone?), you should apply to correct them: https://www.federalregister.gov/documents/2024/12/12/2024-29271/technical-advisory-committee-request-for-nominations
Markets probably 50% overvalued. Maybe more.
“Consequently, if we were to remove these seven stocks from the index, the S&P 500 P/E would be a relatively modest 15.4x. So we can conclude that U.S. stocks are not broadly expensive; rather, the Magnificent 7 are.”
An alternative view.
When are government jobs going to removed from job data. These are tax increases paid for government services
Along those lines, we should be calling them the “productive sector” and “dependent sector” rather than ‘private sector’ and ‘public sector’
It’s more nuanced than that. To be fair, some parts of the public sector are productive, though they could be more productive. The nation’s single most valuable product is actually educated children. So teachers are extremely productive (but again, could be more so). I think we all appreciate firefighters today as well. And police. There shouldn’t be public unions, but again that’s another topic.
Meanwhile, over in the “private” sector, somehow there are thousands of jobs in the censorship industry, which is counterproductive, and in healthcare we know 50% of the cost is wasted effort (outcomes not any better), so half of those jobs are presumably unproductive “dependent on Medicare and systemic inefficiency” as well.
I think we do need to understand what’s productive work and what isn’t, but it’s not as simple as “private good, public bad”.
Fair enough. But the dependent sector could not exist without the productive sector, whereas the productive sector would function fine (or even better) with only about 2% of the dependent sector to police violence/fraud.
(More trivially, US education is so much indoctrination that the good it does is vastly tempered by lots of harm.)
Even in the early stages of the 2008 recession, unemployment had some months where numbers dropped after the cycle bottom, but before the final cycle top. The lagging growth of full time jobs is very telling of employer hesitancy to hire for the long term, which translates into hesitancy of consumers to spend as shown in the Consumer Credit article Mish posted earlier this week.
Should RFK jr get the job?
Americans’ largely negative views regarding healthcare coverage and quality in the U.S. likely contribute to the widespread perception that the overall healthcare system has major problems (54%) or is in a state of crisis (16%). The seven in 10 Americans now holding these views is in line with the trend average of 69%.
https://news.gallup.com/poll/654044/view-healthcare-quality-declines-year-low.aspx
As member physicians of the CPHC, we are outraged by this appointment and we call on the Senate to act immediately. Reject Robert F. Kennedy Jr.’s nomination and demand qualified leadership at HHS that prioritizes science, the protection of public health, and the well-being of all Americans. The health and security of our nation depend on it. Anything less is an abdication of responsibility to the American people.
https://committeetoprotect.org/
The medical-industrial complex is extremely corrupt. Obamacare having completed its collectivization in a corporatist/fascist direction. No one is better equipped to do something about it than RFK, jr, a very smart and good person.
RFK Jr. needs to be confirmed. If the government cared about prioritizing science, they would’ve never released the VAX. We need someone in charge who is going to stop on the junk allowed in our foods.
Mish, are you standing by your recession thesis?
He’s moving towards my inflationary depression thesis frankly. It’s slow, but he’s getting there.
And what pray tell is an inflationary depression thesis?
Inflation is going to get so bad that we enter a depression?
If so, I can get onboard with that.
We have been in it for years. You’ve lived it. Real incomes are negative for the last 4 years. Nothing like it in recent history for that long a stretch.
The only obvious exploding cost that I’ve had to deal with is my homeowner’s insurance that’s up 40%. My car insurance has been stable. Food prices rose sharply but my shopping at Aldi for a lot of the basics has helped tremendously. I drive a Prius, so my gas budget is already low. My health insurance did rise $32 a month this year, but I got a nice $2,500 pay raise from the state and a $2,200 merit increase. My total Fidelity account balances rose $45K last year, and I’m an extremely conservative investor.
My life is far from a depression, but that’s mainly because I’m in ~ the top 30-percentile of income.
Be that as it may, I fully expect things to get bad between now & 2030. We are definitely in an inflation super cycle.
I wrote on Wolf’s blog the other day that the only cure for the current inflation is a big recession. I really don’t want that to happen, but it certainly seems like it’s becoming more & more inevitable / needed.
I do hope Trump starts to get the ship turned. My wish list would be for him & Congress to make his tax cuts mostly permanent, except for those making above $500K. I like the idea of him cutting taxes on SS down from 85% to 50% but not completely and maybe ending taxes on tips up to a certain level. But that’s as far as I’d want him to go there. Unfortunately, he’s aligned himself with Musk who apparently is willing to fight to the death for H1-B visas which is simply outrageous. I’m hopeful that people like Steven Bannon are able to put the heat on Trump to ditch Musk & his affinity for hiring foreigners over Americans.
Like I posted above, if we made big gains towards replacing a large portion of illegals working in residential construction & ending H1-B visas, America would be extraordinarily better off.
They can keep the H1-B visas if they put the minimum wages at $50/hr and make them non-exempt, so time and a half applies.
If those skills are that essential then you will pay for them. It’s lowballing the salary and working them 80 hours a week because they are essentially indentured servants that offends the non-CEO class.
If Aldi in the USA is anything like Aldi in Australia I feel sorry for you. Spend some of your money and buy quality food. Or better yet plant a vegetable garden.
Mish’s third graph above shows 48 straight months (length of a Presidency?) of employment gains. So maybe the depression is supposed to start in the future?
And real incomes started decreasing during Trump’s fight with COVID and high unemployment, but rebounded afterwards. But they are still higher than 4 years ago: https://fred.stlouisfed.org/series/MEHOINUSA672N
Avg earnings down. Hours down….Meanwhile inflation expectations the highest in 16 fucking years. This disastrous admin ends with fires raging across the country. Literally in CA and inflation for the rest of a broken populace yearning for an end to the madness.
Earning weren’t down. Up 3.8/3.9%. Hours were flat.
Compared to expectations….thank you for the correction
Participation rate….typo
The labor force participation rate was the same as in November and has been in the same 62.5-62.7% range for the last twelve months.
Why don’t you try taking a moment to read and digest the data before spouting off a political POV? Maybe people will take your comments more seriously
How dare you not validate his alternative facts. Very hurtful.
FYI I cant see your comments.
Do they hurt too much to look at, boo boo?
Too bad; he’s usually a good interpreter for your comments to those that don’t know better than to fact-check you
Maybe it is time to just toss the household survey and find a better way to capture those not included in the traditional employer survey?
I would say to toss the employer survey, which is the most prone to misleading the public at economic turning points (b/c of the inherent flaws in birth/death model). That makes it downright harmful as opposed to merely useless.
I’m 100% in favor of strengthening or replacing the Household Survey with something more comprehensive, though. But it’ll be hard to track all forms of employment.