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December 2016 Nonfarm Payroll Update

With the BLS release of December nonfarm payroll (NFP) numbers we can compare 2016 job growth to that of 2015. First, though let’s take a look at year-on-year (YoY) changes since 1990:

Nonfarm Payroll December 2016 update

While the economy continues to add jobs, the rate is slowing: 2.03 million in 2016 compared to 2.79 million in 2015. In percentage terms, NFP employment grew by 1.4% in 2016 compared to 2.0% in 2015. Here’s table showing employment growth (in millions) and the YoY percent change for each year of the current expansion:

Table: NFP Employment Growth 2010 to 2016

2016 has posted the smallest job growth since 2010, and slightly less than 2011. Job growth for the current expansion may have peaked in 2014.

Here’s a table showing NFP employment growth in 2016 and 2015 at the industry level:

NFP employment contribution by industry 2015 and 2016

A few observations:

  • In 2016, as in 2015, growth was largely being driven by these four industries:
    • Education and health services
    • Professional and business services
    • Trade, transportation, and utilities
    • Leisure and hospitality
  • Construction’s contribution for 2016 was less than half that of 2015 in percentage terms.
  • As noted above, manufacturing and state governments switched from positive contributions (adding jobs) in 2015 to a negative (losing jobs) in 2016.
  • Compared to 2015, local governments were a significant source of job growth.

This chart shows the contribution to NFP employment by industry for both 2015 and 2016:

graph of contribution by industry to NFP employment growth 2015 and 2016