December 1996 Employment Situation

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Nonfarm payroll employment increased in December, and the unemployment rate was unchanged at 5.3 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The number of payroll jobs rose by 262,000 over the month, with gains occurring among most of the major industry groups. Average hourly earnings rose by 6 cents in December, following a 9 cent rise in the prior month.

Unemployment (Household Survey Data)

Both the number of unemployed persons, 7.2 million, and the unemployment rate, 5.3 percent, were unchanged in December, although both figures showed modest improvement in 1996. December jobless rates for the major worker groups--adult men (4.4 percent), adult women (4.9 percent), teenagers (16.5 percent), whites (4.6 percent), blacks (10.5 percent), and Hispanics (7.7 percent)--showed little or no change over the month. (See tables A-1 and A-2.)

Total Employment and the Labor Force (Household Survey Data)

Total employment, at 127.9 million in December, was little changed from the November level, but has expanded by 2.8 million over the past year. This gain was split nearly evenly between men and women. The proportion of the population 16 years and over that was employed (the employment- population ratio) was 63.4 percent in December, unchanged over the month but up 0.7 percentage point from a year earlier. (See table A-1.)

The number of persons employed part time for economic reasons rose by 355,000 in December to 4.3 million, after a decline of similar magnitude in November. The size of this group held at or near 4.3 million for most of 1996. (See table A-3.)

About 8.2 million persons (not seasonally adjusted) held more than one job in December. These multiple jobholders comprised 6.4 percent of all employed persons, up slightly from a year earlier. (See table A-9.)

Both the civilian labor force and the labor force participation rate were essentially unchanged over the month, though both measures have risen over the past year. The labor force grew by 2.6 million in 1996, with women accounting for three-fifths of the increase. The labor force participation rate rose by 0.6 percentage point over the year, to 67.0 percent in December. (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

About 1.5 million persons (not seasonally adjusted) were marginally attached to the labor force in December--that is, they wanted and were available for work and had looked for jobs sometime in the prior year. These persons were not classified as unemployed because they were not currently looking for work when surveyed in December. The total number of marginally attached workers was down slightly over the year. (See table A-9.)

The number of discouraged workers--a subset of marginally attached workers who were not currently looking for jobs specifically because they believed no jobs were available for them or there were none for which they would qualify--was 334,000 in December, also down slightly from a year earlier.

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment increased by 262,000 in December to 120.7 million, after seasonal adjustment, and rose by 2.6 million over the year. The private sector added 231,000 jobs in December. (See table B-1.) Private sector job growth during the fourth quarter averaged 218,000 per month, well above the third-quarter average of 147,000.

Employment in the services industry increased by 112,000 in December, the largest gain since May. Increases occurred in nearly all components of the industry. Business services added 45,000 jobs, following a small loss in November. Computer services employment continued its rapid rise. Help supply added 12,000 jobs in December, following a net decline over the prior 3 months. Elsewhere in services, job gains continued in health services, engineering and management services, and amusement and recreation.

Retail trade employment rose by 48,000 in December. Much of the gain was in eating and drinking places, where estimated growth has been inconsistent during the year. In December, employment continued to rise in furniture and home furnishings stores and building supplies retailers, each of which added workers at a brisk pace in 1996. Following strong seasonal hiring in October, employment in general merchandise stores declined in November and December, after seasonal adjustment. Wholesale trade showed sluggish job growth for the second straight month.

Employment in transportation and public utilities edged up by 5,000 in December, as strength in air transportation more than offset declines in trucking, communications, and public utilities. Finance, insurance, and real estate employment rose by 17,000 in December, continuing its relatively strong growth trend. Gains were concentrated in finance, particularly in nondepository institutions, security brokerages, and holding and other investment offices.

Manufacturing added 19,000 jobs in December. Over-the-month job growth was widespread, with notable increases occurring in aircraft and in food and kindred products. From September through December, factory employment increased by 32,000. Despite this gain, 94,000 factory jobs were lost in 1996, as steep declines in nondurable goods industries were only partially offset by gains in durables.

Aided by unusually mild weather across most of the country during the December reference period, employment in the construction industry rose by 23,000 in December. Over the year, construction employment increased by 287,000, more than 2-1/2 times the rise in the prior year.

Government employment rose by 31,000 in December, after seasonal adjustment. Most of the increase was in the noneducation component of local government, reversing a decrease in the prior month. Fewer poll workers had been reported in November than expected by the seasonal factors, so that there were fewer to dismiss following the elections. Since federal government employment reached its most recent peak in May 1992, job losses have totaled 322,000 (not counting the Postal Service, which has added workers).

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls increased by 0.3 hour in December to 34.8 hours, seasonally adjusted. The manufacturing workweek also rose by 0.3 hour to 42.0 hours and factory overtime, at 4.7 hours, was up by 0.2 hour. Both the manufacturing workweek and overtime hours were at their highest levels since early 1995. (See table B-2.)

The index of aggregate weekly hours of private production or nonsupervisory workers on nonfarm payrolls rose by 0.9 percent, seasonally adjusted, to 139.2 (1982=100) in December. The manufacturing index increased by 0.8 percent to 106.9. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of private production or nonsupervisory workers on nonfarm payrolls rose 6 cents in December to $12.05, seasonally adjusted, following an increase of 9 cents in the prior month. Average weekly earnings increased by 1.4 percent in December to $419.34. Over the past year, average hourly earnings rose by 3.8 percent, while average weekly earnings increased by 5.3 percent. (See table B-3.)

Revision of Seasonally Adjusted Household Survey Data

At the end of each calendar year, BLS routinely updates the seasonal adjustment factors for the labor force series derived from the Current Population Survey (also referred to as the household survey) to incorporate the experience of that year. This year, seasonally adjusted data for January 1994-December 1996 are subject to revision. (Seasonally adjusted establishment data will be revised in June, concurrently with the introduction of annual benchmark adjustments.)

The January 1997 issue of Employment and Earnings will contain the new seasonal adjustment factors for major series for the January-June 1997 period. The publication also will contain a description of the current seasonal adjustment methodology and revised data for the most recent 13 months or calendar quarters for all regularly published tables containing seasonally adjusted household survey data. Historical seasonally adjusted monthly and quarterly data also are available on the Internet. Internet users can access these data from the ftp://stats.bls.gov/pub/special.requests/lf directory.

Planned Changes in the Household Survey Data

Effective with the release of data for January 1997, revisions will be introduced into the population controls used for the household survey. These revisions reflect primarily new information on the magnitude and demographic characteristics of net immigration, and will result in an upward shift in the estimated civilian noninstitutional population 16 years and over for January 1997. The changes will add approximately 470,000 on top of trend growth between December and January. The bulk of the adjustment will occur among Hispanics and the “other races” category. The changes and their effect on the estimates of labor force change and composition will be described in an article slated to appear in the February 1997 issue of Employment and Earnings.

HOUSEHOLD DATA HOUSEHOLD DATA

1995 1996 Employment status, sex, and age Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

TOTAL

Men, 20 years and over

Women, 20 years and over

Both sexes, 16 to 19 years

1 The population figures are not adjusted for seasonal variation. NOTE: Seasonally adjusted data have been revised based on the experience through December 1996.