The latest jobs report could signal less momentum heading into 2020.
Photo: Tim Rue/Bloomberg NewsGrowth—And Revisions
The January employment report will be released Friday, with U.S. payrolls figures offering a gauge of labor-market strength at the start of the year. For longer-term context, keep an eye on annual benchmark revisions to employment. A preliminary tabulation, released in August, showed employers added about 2 million jobs in the year through March 2019, 501,000 less than initially thought. Final benchmark revisions out Friday will spread that loss from April 2018 to March 2019. Other adjustments could affect the remainder of 2019’s job figures. There really shouldn’t be any major surprises. But how the revisions fall could signal less momentum heading into 2020.
Hours Watch
Look at the number of hours worked. Average weekly hours for private-sector employees have declined annually for nine straight months. Meanwhile, year-over-year growth in private-sector payrolls has cooled. “A reduction in average hours isn’t necessarily a sign of impending doom for the labor market,” said Nick Bunker, an economist at job site Indeed. “Yet lower average working hours contribute to lower weekly earnings growth—which may hinder economic growth moving forward.” Growth in average weekly earnings for private-sector workers slowed to 2.3% in December from a year earlier, compared with 3.5% in January 2019.
Wages Watch
Monitor average-hourly earnings growth for further evidence that wage growth is stalling. Last week a separate pay measure showed wages for private-sector workers were up 3% year-over-year in the fourth quarter, marking the fourth straight quarter of such growth. Stagnant pay gains can hold back consumer spending, a key ingredient in economic growth. Still, there is a silver lining: Prices have risen only slightly in recent months, limiting the pinch consumers might feel from slowing wage gains.
Discouraged Workforce
Watch for a drop in a broad measure of unemployment, which includes those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full time. The U-6 rate hit an all-time low of 6.7% in December, signaling the labor market continues to wring out slack as the unemployment rate stabilizes around a half-century low.
Married Rate
In the January jobs report the Labor Department will for the first time include men and women in same-sex marriages in unemployment rates for married Americans. Before this, it only included jobless rates for men and women in opposite-sex marriages in its monthly jobs report. Those data show married Americans are highly likely to hold jobs. In December, the unemployment rate for married men logged in at 1.6%, while the unemployment rate for married women was 2.1%, both well below the overall jobless rate of 3.5%.
Write to Sarah Chaney at sarah.chaney@wsj.com and Jeffrey Sparshott at jeffrey.sparshott@wsj.com
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February 07, 2020 at 12:01PM
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