Ending the Year on a High Note: The 2017 December National Employment Report
According to the ADP National Employment Report (NER), every size of U.S. business saw strong jobs growth this December. It was, however, the surprising pace of small business hiring that made 2017's final month into one of the year's strongest.
Small business gained a remarkable 94,000 of these, helping to bring the year's fourth quarter monthly average for small business up to about 70,000. Manufacturing was one of the few industries that did not exceed its 2017's monthly average, adding just 9,000 jobs, while the information industry was the only one which saw an overall drop in employment, losing roughly 4,000 jobs.
Just about everywhere else saw an uptick in growth, sharing in the credit for the strong month overall. There were still some industries that pulled more than their fair share of the weight.
Trade Surged in an Unexpectedly Prosperous December
To an even greater extent than most months, December was driven by jobs in the services sector, which added 222,000 of the 250,000 jobs gained overall. As is usually the case, this number saw the greatest contributions from hiring in education and healthcare (50,000) and the professional and business services (72,000). Both have provided consistent growth for most of the year, and their reliable performance continues to be the linchpin of all growth in service industries.
That said, it was the 45,000 jobs added by the trade, transportation and utilities industries that really outperformed expectations and pushed December well beyond the year's average monthly figures. Trade by itself, for example, saw an industry average of 28,000 new jobs per month in Q4.
Consistency is the Key to Prosperity
Despite its volatile jobs performance over the past year, the trade, transportation and utilities industry finished 2017 with more jobs than when it began, continuing a seven-year streak. Even better, there is no sign that this long-term trend is about to stop, since it has been buoyed mostly by sustainable increases in demand for their services.
Mark Zandi, chief economist of Moody's Analytics, said that "the job market ended the year strongly, according to the Guardian. He added that "robust Christmas sales prompted retailers and delivery services to add to their payrolls." That's likely how December turned out to be so far beyond expectations: the consistent performance of all of the US labor market's most dependable industries.
Zandi and others have noted that 250,000 new jobs is so many that the market could be prone to "overheat," and then begin a downward correction in hiring, and eventually wages, nationwide. December, however, showed no signs of slowing growth. Workhorses like leisure and hospitality came through as expected, while even troubled corners of the economy showed an uptick.
Manufacturing Ended 2017 with a Badly Needed Surge
Though December itself was a month of only modest growth for the manufacturing industry (9,000 jobs), it capped a strong fourth quarter that provided a badly needed surge in hiring. Overall, manufacturing companies hired almost 213,000 people in 2017 — a stark difference from 2016, which saw zero job gains in manufacturing overall. A slight weakening of the U.S. dollar is seen as one major contributor to the manufacturing sector's growth, since it has spurred significant new interest in American products abroad.
In all, 2017 was a strong year for the U.S. labor market. It saw the market's dependable performers deliver as expected, while being further buoyed by unexpected surges among the rest.
