Jobs Report: 5 Things To Know About The Latest Numbers

The labor market added 156,000 jobs in December, falling just below industry predictions but maintaining enough momentum to keep pace with population growth, according to the jobs report released Friday by the Bureau of Labor Statistics.

Unemployment remained steady at a low 4.7 percent . Hourly wages increased by 10 cents an hour.

Here are the main takeaways from the report:

1. Wage growth for 2016 was its highest since 2009.

"Hourly wages grew 2.9 percent from a year earlier, the fastest pace since 2009," said Chief Economist Curt Long for National Association of Federally-Insured Credit Unions. "Moreover, wage gains were spread broadly across industries."

Sluggish wage growth, despite overall growth, has been a recurring complaint about the labor market for decades. Recent trends suggest it may be on the rebound:

2. 2016 job growth was lower than 2015, but it continued encouraging economic trends.

University of Michigan economist Justin Wolfers notes that positive job growth in December marked 75 straight months of gains, the longest streak in U.S. history.

However, the 2016 average monthly job growth was 180,000, whereas the 2015 average was 229,000 jobs a month.

"As we close the books on jobs creation for 2016, we get confirmation that total hiring for the year just-completed didn’t hit the higher levels of the previous year," said Mark Hamrick, senior economic analyst at Bankrate.com. "But, for a recovery that began in 2009, it is natural to see a slower rate of hiring and we expect smaller hiring gains this year as well."

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3. The Fed will see no reason to doubt its December rate hike.

In December, the Federal Reserve announced plans to raise interest rates for only the second time since the 2008 financial crisis. Though some still doubt the wisdom of this move, the newest numbers will only serve to reinforce Federal Open Market Committee's current view of the economy.

"While the labor market continues to hum along, this report does not raise alarm bells for the Fed as it considers the next rate hike," said Long, the chief economist for the credit union association. "Wage growth is improving but still not strong enough to suggest that the Fed is in danger of getting behind the curve."

3. Recent spikes in consumer confidence shouldn't be visible yet.

Despite marked increases in consumer confidence increases in December, likely tied to the presidential election given the divisions by political party, we shouldn't necessarily expect these effects to translate into stronger job numbers any time soon.

"Consumers and businesses are hopeful that the new president and Congress can enact measures leading to better growth and employment," said Hamrick. "Even if and when those moves (such as tax reform and infrastructure spending) do occur, it could well be 2018 before they have a truly positive impact on the economy."

He also noted: "While a number of readings assessing confidence or sentiment have risen lately, those aren’t likely to help lead to a sharp increase in hiring in the near-term."

5. Questions remain about those out of the workforce

The low unemployment rate of 4.7 percent is generally viewed as a positive economic indicator. However, it only includes those individuals who want a job and are actively looking, not those who have given up on finding employment.

People who have dropped out of the workforce entirely are missed by the headline unemployment rate, and they have been a particular concern for economists in the post-2008 era as the labor force participation rate languishes at around 62.7 percent, its lowest rate since 1978. The decline in the participation rate has been attributed, though, less to the economy and more to retiring baby boomers, the increasing numbers of people on disability, an increase among women choosing not to work and an increase in people deciding to attend college. The Bureau of Labor projects that labor force participation will continue to gradually decline and reach 60 percent in 2050.

Photo credit: Tony Webster