With the BLS release of December nonfarm payroll (NFP) numbers we can compare 2017 job growth to that of 2016. First, let’s take a look at year-on-year (YoY) changes since 1990:
The economy continues to add jobs, with employment growth of 2.19 million in 2017 compared to 2.10 million in 2016. In percentage terms, though, 2017 NFP employment growth was the same as that of 2016, 1.5%. Here’s table showing employment growth (in millions) and the YoY percent change for each year of the current expansion:
2014 posted strongest gains of the current expansion with just over 3 million jobs, and 2.2% growth compared to the previous year. 2018 is likely to see even slower job growth due to supply of labor constraints as evidenced by record low unemployment rates.
Here’s a table of NFP employment growth in 2016 and 2017 at the industry level:
The below chart shows the percentage contributions by industry from the above table in a way that makes it easier to visualize which industries drove job growth in 2016 and 2017:
A few observations:
In 2017, as in 2016 growth is largely being driven by these four industries:
• Education and health services
• Professional and business services
• Trade, transportation, and utilities
• Leisure and hospitality
However, these four industries each added fewer jobs in 2017 than they did in 2016. The drop in job added is especially noticeable for Trade, transportation, and utilities which added fewer than half as many jobs in 2017 as 2016.
Construction’s contribution for 2017 was almost double that of 2016.
Manufacturing, which lost jobs in 2016, rebounded in 2017 with 198,000 jobs added. While this is welcome change compared to 2016, we should note two things: 1) manufacturing employment has been steadily growing since bottoming out in 2010; 2) despite that, manufacturing employment is still far below the level of 2007.