Economy Adds Fewer Jobs in December; Small-Business Hiring Flattens
Jan. 10, 2006--The economy added 108,000 jobs nationwide in December, down from a revised increase of 305,000 the previous month, the Labor Department reported Friday -- echoing similar findings from a recent survey of small-business payrolls.
While some industries added jobs in December -- including food services, professional and business services, health care, and manufacturing -- the unemployment rate, at 4.9%, was little changed from November, and has remained between 4.9% and 5.1% since March, the Labor Department said.
A total of 7.4 million people were without jobs in December, with total hours worked per employee falling by 0.2% to an average workweek of 33.7 hours. At the same time, average hourly wages climbed 0.3%, or five cents, to $16.34, the report showed.
The figures closely reflected the situation at the nation's small businesses, which also ended the year with fewer new jobs, according to SurePayroll, a Skokie, Ill.-based small-business payroll firm.
On Jan. 3, SurePayroll's monthly small-business scorecard, which surveys some 15,000 small businesses nationwide, showed hiring at small businesses was flat in December after three months of consecutive declines. For the year ending Dec. 31, hiring grew by just 0.3%, compared to 4.4% over the same period in 2004 -- promting the group's president, Michael Alter, to dub 2005 a "yawner of a year for small-business growth."
Still, things are expected to pick up again in the new year. Already, with Gulf Coast businesses starting to rebuild lost inventories and U.S. airlines boosting orders for new planes, overall factory orders in November were up by 2.5%, the Commerce Department reported on Jan. 4. Total orders for December will be released later this month.
In a separate report Tuesday, the Commerce Department said construction spending rose by 0.2% in December, bolstered by non-residential construction. Homebuilding, which has begun to lag in recent months, was flat for the first time since June, the report showed.
Another positive sign came on Jan. 3, when notes released from a closed Dec. 13 meeting of the Federal Open Market Committee hinted at fewer interest rate hikes heading into 2006, citing a drop in energy prices, among other factors. "Recent data suggested that, thus far, indirect effects of elevated energy prices on core inflation had been muted," the notes said. The Fed began raising interest rates to contain inflation in mid 2004.