A strong December does not make up for a really bad year overall
This article first appeared on SchiffGold.
The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the Headline Report, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
The BLS reported a gain of 256k jobs which was well above expectations. The bigger surprise was the strong number that came from the Household Survey: 478k new jobs.
Figure 1: Primary Report vs Household Survey - Monthly
Despite the massive beat from the Household Survey, it doesn’t change the trend for this year which has been a massive underperformance in the Household Survey compared to the Headline Report. For the year, the Household Survey was less than 25% of the total Headline Report number. For context, the Headline Report showed 2.23M new jobs for the year where the Household Survey showed 537k. That is a massive divergence and should call into question nearly every job report for the year.
Figure 2: Primary Report vs Household Survey - Annual
The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In December, this was not a driver similar to November.
Figure 3: Primary Unadjusted Report With Birth Death Assumptions - Monthly
Despite very low assumptions for November and December, the birth-death assumptions were responsible for 55% of the total jobs for 2024. This is the highest number going back at least 10 years.
Figure 4: Primary Unadjusted Report With Birth Death Assumptions - Monthly
The 256k jobs number was accompanied by a drop in unemployment rate to 4.1%.
Figure 5: Change by sector
When looking over the last 12-month trend, the latest report shows only manufacturing as underperforming in any meaningful way.
Figure 6: Current vs TTM
The table below shows a detailed breakdown of the numbers.
Monthly Average Change | Total % Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Total Employed | Current Month | 3 Months | 12 Months | 3 years | Current Month | 3 Months | 12 Months | 3 years |
Private Sector | |||||||||
Construction | 8,316 | 8 | 5.0 | 16.3 | 20.1 | 0.1% | 0.2% | 2.4% | 8.7% |
Education Health | 26,802 | 80 | 80.3 | 80.9 | 80.9 | 0.3% | 0.9% | 3.6% | 10.9% |
Financial | 9,286 | 13 | 9.7 | 4.4 | 9.7 | 0.1% | 0.3% | 0.6% | 3.7% |
Information | 3,004 | 10 | 4.0 | -0.7 | 1.0 | 0.3% | 0.4% | -0.3% | 1.2% |
Leisure Hospitality | 17,101 | 43 | 29.0 | 23.8 | 51.3 | 0.3% | 0.5% | 1.7% | 10.8% |
Manufacturing | 12,873 | -13 | -13.3 | -7.2 | 8.3 | -0.1% | -0.3% | -0.7% | 2.3% |
Mining and Logging | 634 | -3 | -0.7 | -0.8 | 1.5 | -0.5% | -0.3% | -1.4% | 8.5% |
Other Services | 5,935 | 8 | 4.3 | 5.9 | 8.9 | 0.1% | 0.2% | 1.2% | 5.4% |
Prof Business | 22,978 | 28 | 9.0 | 8.0 | 24.7 | 0.1% | 0.1% | 0.4% | 3.9% |
Trade Trans Utils | 29,091 | 49 | 10.7 | 18.7 | 25.0 | 0.2% | 0.1% | 0.8% | 3.1% |
Government | |||||||||
Government Federal | 3,010 | 6 | 3.0 | 4.1 | 3.5 | 0.2% | 0.3% | 1.6% | 4.2% |
Government Local | 14,975 | 17 | 17.3 | 22.0 | 25.3 | 0.1% | 0.3% | 1.8% | 6.1% |
Government State | 5,531 | 10 | 12.0 | 10.6 | 11.4 | 0.2% | 0.7% | 2.3% | 7.4% |
Total | |||||||||
All | 159,536 | 256 | 170.3 | 186.0 | 271.5 | 0.2% | 0.3% | 1.4% | 6.1% |
Values in 1,000s of workers. Data as of: Dec 2024. Total Employed = Entire size of the labor market. | |||||||||
The chart below shows how the jobs data had a lot of revisions earlier in the year but that has slowed some in recent months.
Figure 7: Revisions
The put numbers to it, jobs have been revised up by about 5k in the last three months, but been revised down by 27k per month going back a year.
3 Month Compare | 12 Month Compare | 3 Year Compare | |||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff |
Private Sector | |||||||||
Construction | 33 | 26 | 2.3 | 206 | 240 | -2.8 | 747 | 678 | 1.9 |
Education Health | 252 | 216 | 12.0 | 975 | 949 | 2.2 | 2,873 | 2,916 | -1.2 |
Financial | 22 | 30 | -2.7 | 46 | 79 | -2.8 | 363 | 304 | 1.6 |
Information | 3 | 13 | -3.3 | -5 | 5 | -0.8 | 41 | 94 | -1.5 |
Leisure Hospitality | 105 | 92 | 4.3 | 283 | 411 | -10.7 | 1,972 | 2,139 | -4.6 |
Manufacturing | -39 | -37 | -0.7 | -62 | -40 | -1.8 | 352 | 337 | 0.4 |
Mining and Logging | 2 | 0 | 0.7 | -3 | -8 | 0.4 | 64 | 57 | 0.2 |
Other Services | 11 | 17 | -2.0 | 63 | 76 | -1.1 | 333 | 361 | -0.8 |
Prof Business | 21 | 7 | 4.7 | 81 | 133 | -4.3 | 979 | 1,193 | -5.9 |
Trade Trans Utils | 3 | 25 | -7.3 | 199 | 286 | -7.2 | 917 | 1,023 | -2.9 |
Government | |||||||||
Government Federal | 7 | 5 | 0.7 | 52 | 49 | 0.2 | 114 | 113 | 0.0 |
Government Local | 42 | 53 | -3.7 | 293 | 275 | 1.5 | 930 | 839 | 2.5 |
Government State | 48 | 48 | 0.0 | 138 | 134 | 0.3 | 398 | 294 | 2.9 |
Total | |||||||||
All | 510 | 495 | 5.0 | 2,266 | 2,589 | -26.9 | 10,083 | 10,348 | -7.4 |
Values in 1,000s of workers. Because this data is focused on revisions, it is as of the month prior: Nov 2024. "Current" shows the change in employment after revisions. "As Of Published" shows change in employment at time of release. "Avg Month Diff" shows the average monthly change from the revisions. | |||||||||
Another level of detail in the Household report shows full-time vs part-time job holders. In December, both full-time and part-time job holders added jobs, reversing the losses in November.
Figure 8: Full Time vs Part Time
The chart below shows data going back to 1955.
Figure 9: Historical Labor Market
The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it stayed steady at 62.5%.
Figure 10: Labor Market Distribution
While this was a strong jobs report with outperformance coming from the Household Survey, it does not change the general trend for 2024. The trend has been clear all year… moderate strength in the Headline Report with consistent downward revisions in future months combined with major underperformance in the Household Survey. Trump is not inheriting a strong economy.