Well, kiss that anticipated March rate cut goodbye. According to the BLS, total nonfarm payroll employment increased by 216,000 in December.
But to quote Cousin Eddie from Christmas Vacation, “Now hold on to your wad.” While the headline screamed remarkable, please note that the civilian labor force actually declined. As did the Employment-population ratio (to 60.1).
On the jobs report, the 2 year Treasury yield spiked to 4.4726%.
The odds of a March rate hike are decreasing.
But next month today’s print will likely be revised sharply lower (perhaps even below 175K, meaning today was a miss). Why do we say that? Because once again the BLS revised not just one but both previous months sharply lower:
- October revised down 45K from 150K to 105K
- November revised down 26K from 199K to 173K
This means that ten of the past 11 jobs reports have been revised substantially lower.
There was some unexpectedly weakness in the labor force participation rate which dropped to 62.5% from 62.8%, missing expectations of an unchanged print. That’s because the number of people not in the labor force soared from 99.695MM to 100.540MM, an 845K increase largely due to a change in historical “data.”
Consider the usual split between the Household and Establishment surveys: here, while payrolls reportedly increase by 216K (at least until they are revised lower next month), the Household Survey showed a plunge in employment of 683K!
Sadly, government employment increased by 52,000 in December. Employment continued to trend up in local government (+37,000) and federal government (+7,000). Government added an average of 56,000 jobs per month in 2023, more than double the average monthly gain of 23,000 in 2022.
But the biggest shocker is that the number of full-time jobs actually plunged by 1.5 million in December to the lowest since Feb 2023, while part-time jobs exploded higher by 762K to the highest on record. And there was another record: in the number of multiple jobholders. We will shortly have a post breaking all of this down.
The Household Survey showed a decline of an unprecedented 683K jobs.
So government is the largest growth in jobs (it is Biden after all and all he knows is government). Sad, since government produces nothing but taxes, regulations and debt. THAT is what Biden knows how to do!