2016 finished on a high note when it comes to job growth and consumer spending. In December, 153,000 jobs were added in private-sector employment, according to the ADP Research Institute® National Employment Report (NER). Even though this number is just below the year's average of 174,000 new jobs per month, it's a strong finish to a year of solid growth. As we consider possible 2017 job market trends, December's data could be an indicator of what's to come.
Job Growth Is Strong
Job growth remains strong but is slowing, notes Mark Zandi, chief economist of Moody's Analytics. As the U.S. job market rounds out an unprecedented seven years of growth, a tight talent market means less hiring. Additionally, small businesses could feel the impact of rising wages. Indeed, small businesses lost 3,000 jobs in December, according to the NER. Service-providing industries led the charge with 169,000 new jobs.
Status Quo for Construction and Energy Industries
Meanwhile, the goods-producing sector saw a loss of 16,000 jobs. The natural resources and mining industry lost 5,000, construction lost 2,000 and manufacturing lost 9,000 jobs. These losses were consistent throughout the year, which saw a total loss of 82,000 jobs in energy and 52,000 in manufacturing.
Manufacturing Is Becoming More Sophisticated
The manufacturing industry continues to suffer due to the dollar's strong position. Much of the job growth in this field is associated with what The Atlantic calls "advanced manufacturing." Manufacturing firms are looking to hire workers with the skill sets to work new technologies like artificial intelligence and automation. "Manufacturing still makes up about 12.5 percent of America's gross domestic product, the same as it did in 1960," notes The Atlantic. "People who can work in modern manufacturing—those with computer skills and advanced degrees—are in demand."
High Consumer Spending Pushes Economy Upward
In the service-providing sector, trade, transportation and utilities added 82,000 jobs. The Wall Street Journal reports that consumer holiday shopping was at a rate not seen since the 2000s. According to Gallup, the average daily spend by consumers in December was a whopping $105. And for all of 2016, the daily average was $92 — the highest since 2008.
What's Next in 2017?
As HR leaders look toward 2017, there's little reason to expect any drastic changes. Low oil prices, the adoption of automation and a strong U.S. dollar are likely to cause continued slow growth in the goods-providing sector. Consumers are also likely to experience an increase in discretionary income as wages rise in a tightening talent market, contributing to the trend of growth in service-providing industries.
While the tight talent market is positive for consumer wallets and retail organizations, HR leaders need to be prepared for the months to come. Less talent leads to more competition, which makes it more important than ever to have a strong recruitment and retention strategy and integrated systems that provide the data necessary to accurately forecast workforce needs.
Want to learn more about 2017's HR trends? See below for the other articles in our #HR2017 series:
#HR2017: What We Learned About Benefit Policies in 2016
#HR2017: Can't Miss Info About the FMLA
#HR2017: Don't Be Fooled By the Cost of the ACA This Year
#HR2017: What Last Year Taught Us About the ACA
#HR2017: Top Innovation Trends Coming This Year
#HR2017: Help Your Employees Achieve Their Health and Wellness Resolutions
#HR2017: What's on the Horizon for Workplace Flexibility in the Coming Year?
#HR2017: Talent Acquisition Trends for 2017 — Tips to Attract Rock Stars