Decent December, decent 2019 for jobs. Well, other than a few areas anyway

A few quick thoughts on today's job report before I hop a flight out West.

Overall numbers are pretty good, moderate job growth and unemployment staying at the same low rate.

In December, the unemployment rate held at 3.5 percent, and the number of unemployed persons was unchanged at 5.8 million. A year earlier, the jobless rate was 3.9 percent, and the number of unemployed persons was 6.3 million....

Total nonfarm payroll employment increased by 145,000 in December. Notable job gains occurred in retail trade and health care, while mining lost jobs. In 2019, payroll employment rose by 2.1 million, down from a gain of 2.7 million in 2018.

That preliminary job growth total of more than 2.1 million (1.95 million private sector) is still solid, but is also the lowest number of new jobs in a year since 2011 (well, until it 2019's totals are revised down next month, and it will be). Still, that would be expected in a year when unemployment started near 4% and ended up at 3.5% - there are only so many more people and jobs to be found.

So if job growth is maxing out and unemployment at multi-decade lows, then wages should be jumping due to the tight labor market, right? Eh, not so much, and that's something Bloomberg News noted in its rundown of the jobs report.

Nonfarm payrolls rose 145,000 in December, the least since May, after a downwardly revised 256,000 advance the prior month, according to a Labor Department report Friday. That compares with the median estimate of 160,000 in Bloomberg’s survey of economists. Average hourly earnings climbed a below-forecast 2.9% from a year earlier, the first sub-3% reading since July 2018....

On a monthly basis, average hourly earnings increased by 0.1% in December, missing estimates for a 0.3% gain.

Interestingly, one of the few areas that did have good wage gains in December was in manufacturing, up 11 cents in December and 20 cents over the last 2 months (although its annual gain is only at 3%). But it came at a cost, as 12,000 manufacturing jobs were lost last month, adding to evidence that we had earlier this month that the sector was in recession.

The other bit in the jobs report that raised my eyebrows was this part.

In December, retail trade added 41,000 jobs. Employment increased in clothing and accessories stores (+33,000) and in building material and garden supply stores (+7,000); both industries showed employment declines in the prior month. Employment in retail trade changed little, on net, in both 2019 and 2018 (+9,000 and +14,000, respectively).

A lot of that offsets a seasonally-adjusted "loss" of 22,300 in clothing stores in November which simply seems to be a problem in estimating the amount of seasonal hirings for Christmas shopping season. But that's still a gain of more than 10,000 jobs above "normal" in a time when retail stores are closing everywhere. Let's see how that number changes in coming months as the post-Holiday adjustments occur.

Bottom line - the overall job market wasn't showing signs of recession at the end of 2019 (outside of manufacturing and mining and retail anyway). The key for 2020 is asking where the growth can come from. Right now, it only seems to be in the form of Bubbly markets in stocks and housing, and the rest of us are being pulled along for the ride due to low interest rates, and what happens when the musical chairs eventually stop and the money stops flowing around.