U.S. Economy Added 2 Million Jobs in 2017, Fewer Than in Previous 3 Years
The job market may be the only thing hotter than the stock market.
The U.S. economy added 2 million jobs in 2017, another solid year of gains.
In December, the economy added 148,000 jobs, according to Labor Department figures released Friday. That was below what economists expected, but still the 87th straight month of gains — the longest streak on record.
“The 2017 job market was really great,” said Cathy Barrera, chief economist at ZipRecruiter, a jobs website.
Unemployment remained at 4.1%, matching the lowest level in 17 years.
Wages grew 2.5% compared with a year ago. Wages still aren’t growing as quickly as the Federal Reserve would like, one reason so many Americans still feel left out of the recovery from the Great Recession.
“The real mystery is why hasn’t wage growth really picked up?” says Michael Arone, chief investment strategist at State Street Global Advisors. “That continues to be the challenge for this job market.”
Last year’s job gains were below those of previous years.
The United States added almost 3 million jobs in 2014, 2.7 million in 2015 and 2.2 million in 2016. That trend is what’s expected in such a long economic expansion. As unemployment moves to historic lows, job gains eventually slow down.
Still, industries across the economy added jobs last year.
Manufacturing, an industry that President Trump has sought to boost, added almost 200,000 jobs last year, a turnaround from 2016, when it lost jobs. Construction added 210,000 jobs in 2017. Bars and restaurants hired about 250,000 waiters, cooks and hostesses. Health care continued to lead the pack, adding 300,000 jobs in 2017.
There were weak spots, though: Retail stores lost 67,000 jobs last year after several years of robust gains. Traditional stores are struggling, and some going out of business altogether, as more people shop online.
The number of Americans who are working part-time but want a full-time job is about 5 million, still above where it was before the Great Recession began in late 2007.
That number has come down significantly since it peaked at 9.1 million in 2010. But these workers often are paid less, receive far fewer benefits like health care and are much more likely to live in poverty.
More broadly, the job market is shifting in a way that economists say helps explain why wage growth has been so sluggish.
Shortly after the recession, employers and hiring managers could pick and choose employees because unemployment was so high. Eight years later, with unemployment at 4.1%, workers have the upper hand.
A record share of small business employers, 54%, say they found few or no qualified job applicants in December, according to a report published Thursday by the National Federation of Independent Business, an advocacy group for small employers.
If that trend continues, more companies will be forced to raise wages in a meaningful way to compete for workers.
Already, the best parts of the U.S. job market are showing healthy wage growth.
In Phoenix, where the unemployment rate is a few notches below the national average, wages grew more than 5% in December, the best of any U.S. metro area, according to a separate report by Paychex, a payment processor, and IHS Markit, an analytics firm.