By: Neha Vazarkar
As expected from trends throughout 2019, the number of jobs has increased in the month of December. Job creation numbered at around 145,000 jobs in December, over 100,000 less than the 256,000 added in November, though this does not indicate worsening economic conditions. However, this number fits the overall big picture of the economy, with GDP growth shrinking steadily and the economy being close to reaching full employment for the first time in two decades.
While the job creation was projected to continue steadily, the specific jobs and industries that are being impacted by this creation are the new focus and surprise. Manufacturing and factory jobs had the greatest losses, with over 12,000 factory jobs and 8,000 mining jobs lost in the month of December alone. The greatest losses were reported in the fabricated metal sector. These losses reflect changing times in the United States, as less money is being spent on energy and more innovative technologies are leading to large job losses for the unskilled workforce. Perhaps as a result of the manufacturing and energy job losses, 10,400 jobs were lost in transportation and warehousing. This is not surprising, as these are the industries being the most significantly impacted by slowing growth in the global economy and trade wars with other countries. The manufacturing index from the Institute of Supply Management adds to the bigger picture, with the index falling at a rate reflecting that during June of 2009 when the country was rebuilding its economy after the recession.
Luckily, manufacturing is not a major sector in the United States, and other industries took home big wins in December. After months of declining growth and store closings as a result of online retailing, retail managed to add 41,000 jobs, more than three times the amount lost in manufacturing. The Leisure and Hospitality sector followed suit with 40,000 jobs added, and Education and Health added another 36,000.
A Mall in Chicago, Illinois: The retail sector added 41,000 jobs in December, surpassing manufacturing losses.
Many government candidates, especially Republicans, constantly emphasize the importance of manufacturing to the economy. And while it is completely true that job losses in this industry are not insignificant or meaningless, it is important to realize that they are all part of the trend of shrinking manufacturing jobs since World War II, with only 8.4% of all jobs in the country being in manufacturing in December.
As the decade begins, it is already very clear that the United States is a service economy, but leaves unclear how the job situation will influence voters in the large 2020 election. While some sectors are losing jobs as the economy evolves, there are large opportunities for people to find work in some of the many growing industries in the country. However, while job creation has created some of the lowest unemployment rates that have been consistent since March 2018, it has not come with the pay raises usually expected with such an economy. Average hourly earnings have raised just 2.9% in 2019. While the pay has not increased, many companies are becoming more interested in training under-qualified workers and providing more flexible work scheduling in recent times.
Overall, as 2019 has come to an end there have been no surprises in terms of the economy. Job creation has continued, with the expected sectors taking losses but larger gains being made elsewhere, while lower unemployment rates have not contributed to significantly higher wages for workers.
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20191211.pdf
The Academy Journal for Global Affairs 