- by New Deal democrat
This is the month the birds came home to roost, at least for the year 2025. While the month over month numbers were almost all positive, some strongly so (a repeat of what we saw last January as well, so beware unresolved seasonality), the benchmark revisions were brutal. Which is likely what the Administration was telegraphing in bright neon flashing lights the past few days. In particular, the *entire* gains for 2025 were reduced from 584,000 to 181,000 - an average of only 15,000 jobs gained per month. Also, the normal yearly revisions to the Household Survey, which gives us things like the unemployment rate, did not take place as usual this month, but have been delayed until next month.
As per usual, I am going to report on the monthly changes below. But I anticipate there will be *much* more to say once I have digested the revisions for all of the important leading numbers.
Below is my in depth synopsis.
HEADLINES:
- 130,000 jobs added. Private sector jobs increased 172,000. Government jobs declined -42,000. The three month average rose to +73,000.
- The pattern of downward revisions to previous months continued. November was revised downward by -15,000 to +41,000, and December was revised downward by -2,000 to 48,000, for a net decline of -17,000.
- The alternate, and more volatile measure in the household report, rose by 528,000 jobs. On a YoY basis, this series increased 689,000 jobs, or an average of 57,000 monthly.
- The U3 unemployment rate declined -0.1% to 4.3% compared to its recent high of 4.5%.
- The U6 underemployment rate declined -0.4% to 8.0%.
- Further out on the spectrum, those who are not in the labor force but want a job now declined by -399,000 to 5.809 million..
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and help us gauge how much the post-pandemic employment boom is shading towards a downturn. These were almost all very positive:
- The average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, rose 0.3 hours to 41.4hours, now down only -0.2 hours from its 2021 peak of 41.6 hours.
- Manufacturing jobs rose 5,000.
- Truck driving jobs declined -4,300.
- Construction jobs rose 33,000.
- Residential construction jobs, which are even more leading, rose 300.
- Goods producing jobs as a whole rose 36,000.
- Temporary jobs rose 9,100.
- The number of people unemployed for 5 weeks or fewer declined -134,000 to 2,155,000.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel increased $.12, or +0.4%, to $31.95, for a YoY gain of +3.8%, a rebound from its post-pandemic low of 3.6%. This continues to be significantly above the 2.7% YoY inflation rate as of the most recent report.
Aggregate hours and wages:
- The index of aggregate hours worked for non-managerial workers rose 0.4%.
- The index of aggregate payrolls for non-managerial workers rose 0.8%, and is up 5.1% YoY.
Other significant data:
- Professional and business employment rose 34,000.
- The employment population was unchanged at 64.8%.
- The Labor Force Participation Rate increased +0.1% to 62.5%.
SUMMARY
On a monthly basis, this was a very good report. Almost everything moved in the positive direction. In fact, the only negatives were a decline in trucking jobs and the continuing drumbeat of downward revisions to previous months. Everything else — positive, coincident, and lagging indicators of the employment market — were positive.
But before you break out the champagne, keep in mind that the revisions to the past 12 months were very bad. For all of 2025, less than 200,000 jobs were added. Even with this month’s good report, the 12 month increase was only 359,000 jobs, or an average of 30,000 per month.
I’ll have more to say either later today or over the next few days once I break out the revisions for each significant statistic.
