January 9, 2015

December 2014 Unemployment Report


December 2014

Unemployment Rate:  5.6 percent

Unemployed Americans:  8.7 million


Employment and Unemployment

  • The Department of Labor reported an unemployment rate of 5.6 percent for December, down 0.2 percent from November. It reported an increase of 252,000 nonfarm jobs over last month. Employment for October was revised upward from 243,000 to 261,000 jobs created, and November was revised up from 321,000 to 353,000.   
  • The number of unemployed people in December was 8.7 million, a decrease from last month’s figure of 9.1 million.
  • More than five years after the recession ended, the unemployment rate remains above the 5.2 to 5.5 percent range that Federal Reserve officials consider the long-run average, according to the Wall Street Journal.
  • The number of long-term unemployed, those unemployed for 27 weeks or more, was nearly 2.8 million, accounting for 31.9 percent of the unemployed, an increase of nearly four percent over last month. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent. 
  • The “real” unemployment or U-6 rate is 11.2 percent, down 0.2 percentage point from November. This is the total percentage of unemployed and underemployed workers.
  • The “real” number of unemployed Americans is 17.8 million. These are people who are unemployed (8.7 million), want work but have stopped searching for a job (2.3 million), or are working part time because they cannot find full time employment (6.8 million).
  • In December, employment grew by 48,000 in construction; 52,000 in professional and business services; 44,000 in food services and drinking places; and 34,000 in health care. Employment in furniture and home furnishing stores decreased by 3,600; it decreased by 3,000 in data processing; and it decreased by 14,100 in accounting and bookkeeping services. 

Labor Force Participation

  • The labor force participation rate is 62.7 percent, down 0.2 percentage point from last month and near the lowest level in more than 36 years. Since April 2014, the participation rate has been stuck between a narrow range of 62.7 and 62.9 percent. Prior to the recession, the rate stood at 66 percent. 
  • If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.9 percent.
  • The share of American adults with jobs in December was 59.2 percent, unchanged for the last three months. This is more than four percentage points below its pre-recession peak. 

Wages

  • Also of concern to economists is the stagnant growth in wages. Average hourly earnings for all employees on private nonfarm payrolls fell by five cents to $24.57. Over the year, average hourly earnings have risen by only 1.7 percent.
  • December was the 64th straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent.

Issue Tag: Labor