More Jobs: January 6 – 10

The labor market ends 2024 on a high note. Here are the five things we learned from U.S. economic data released during the week ending January 10.

Employers accelerated hiring in December. Nonfarm payrolls grew a seasonally adjusted 256,000, up from the 43,000 and 212,000 jobs gains in October and November. The October and November figures represent a net 8,000 downward from previously reported figures. The same Bureau of Labor Statistics report has the private sector adding 223,000 workers during the month, with the service sector payrolls swelled by 231,000 jobs. Industries creating the most jobs were health care/social assistance (+69,500), retail (+43,400), and leisure/hospitality (+43,000). Average weekly earnings grew 3.6 percent over the past year to $1,224.17.

A separate survey of households shows that the unemployment rate slipped by 1/10^th of a percentage point to 4.1 percent. Even though 243,000 people entered the labor force, the labor force participation rate held steady at 62.5 percent. The 25-54 labor force participation rate decreased by 1/10^th of a percentage point to 83.4. Whereas the typical length of unemployment was 10.4 weeks, 22.4 percent of unemployed people have been jobless for at least 27 weeks. 4.358 million people held a part-time job for “economic reasons” (i.e., slack work/economic conditions, could not find full-time work). The broadest measure of labor underutilization (the U-6 series) shed 2/10^ths of a percentage point to 7.5 percent.

Job openings edged up while hiring slowed in November. The Bureau of Labor Statistics estimates there were a seasonally adjusted 8.098 million open jobs, up 259,000 for the month but down 9.3 percent from a year earlier. The private sector had 7.205 million unfilled jobs at the end of the month, including more than a million open positions in professional/business services and health care/social assistance. Hiring declined by 125,000 to 5.269 million (-5.4 percent versus November 2023). The private sector hired 4.915 million people. 5.126 million people separated from their jobs, down 180,000 for the month and 5.3 percent from a year earlier. This included 3.065 million people quitting their jobs (-218,000 for the month and -12.8 percent from a year earlier) and 1.765 million people laid off (+17,000 for the month and +14.2 percent versus November 2023).  

The service sector gained momentum in December. The Services PMI added 2.0 points to 54.1. This was the tenth time in 2024 (and the sixth consecutive month) that the Institute for Supply Management measure was above a reading of 50.0 (indicating an expanding service sector). Improving were measures for business activity/production, new orders, and inventories. On the flip side, the employment index slipped. Nine service sector industries expanded during the month, led by finance/insurance, arts/entertainment/recreation, and retail. While survey comments expressed “general optimism,” the press release noted, “tariff concerns elicited the most panelist comments.”

Factory orders slipped in November. The Census Bureau reports new orders for manufactured goods declined 0.4 percent to a seasonally adjusted $586.1 billion. Factory orders have totaled $6.412 trillion over the first 11 months of 2024, up a paltry 0.1 percent from a year earlier. Durable goods orders fell 1.2 percent (but were up 0.2 percent net of transportation), while nondurables saw a 0.4 percent gain. Shipments grew for the first time in four months, increasing 0.1 percent to $586.3 billion. Year-to-date shipments of $6.465 trillion were 1.5 percent ahead of their 2023 pace. Unfilled orders grew for a 51^st straight month, adding 0.3 percent to $1.405 trillion, while inventories expanded 0.3 percent to $859.3 billion, or its first gain in three months.

The trade deficit widened in November as exports and imports rose. Exports increased 2.7 percent to a seasonally adjusted $273.4 billion and imports grew 3.4 percent to $351.6. The resulting trade deficit of -$78.2 billion leaves the Census Bureau and Bureau of Economic Analysis measure up 6.2 percent for the month, with the year-to-date deficit of -$813.9 billion 13.0 percent ahead of the comparable 2023 months. The goods deficit swelled by $5.4 billion to -$103.4 billion, whereas the services surplus increased $0.9 billion to +$25.2 billion. The former grew despite increased exports for industrial supplies/materials, automobiles/parts, capital goods, and pharmaceuticals. The U.S. had its largest goods deficits with China, the European Union, Mexico, and Vietnam.

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending January 4, 2025, First-Time Claims, seasonally adjusted): 201,000, -10,000 vs. the previous week, +3,000 vs. the same week a year earlier). 4-week moving average: 213,000 (+4.4% vs. the same week a year earlier).
• University of Michigan (January 2025-Preliminary, Index (1966Q1=100), seasonally adjusted): 73.2 (December 2024: 74.0; January 2024: 79.0).
• Vehicle Sales (December 2024, Autos and Light Trucks, seasonally adjusted annualized rate): 16.798 million (+0.9% vs. November 2024; +5.5% vs. December 2024).
• Consumer Credit (November 2024, Outstanding Non-Real Estate Backed Consumer Debit, seasonally adjusted): $5.102 trillion (-7.5 billion vs. October 2024; +1.7% vs. November 2023).
• Wholesale Trade (November 2024, Total Inventories of Merchant Wholesalers, seasonally adjusted): $901.6 billion (-0.2% vs. October 2024, +0.8% vs. November 2023).
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