The economy added 148,000 jobs in December after a year of steady hiring, the government employment report said Friday.
The jobless rate held steady at 4.1 percent last month, the lowest point since 2001, while the country hit its 87th straight month of expansion, with health care and professional services driving much of the gains.
Wages continued their slow climb, rising by 9 cents. That’s a 2.5 percent rise since December 2016 (and still below pre-recession levels).
The numbers missed expectations — analysts had predicted between 200,000 and 250,000 new positions — but they still send a promising message to job seekers: Employers will be increasingly desperate for your applications in 2018.
“There’s almost one job open for every unemployed person,” said Dan North, chief economist at Euler Hermes North America, a credit insurance firm.
There are now six million vacancies in the United States and 6.6 million unemployed people, to be more precise. From January to November, the economy added 1.9 million jobs.
However, companies nationwide keep struggling to fill roles, citing tight labor markets, retiring baby boomers and failed drug tests. Factories, hospitals, contractors and eateries, among other employers, face this trouble.
“Restaurants are finding it extremely challenging to find workers,” Sonia Riggs, president and chief executive of the Colorado Restaurant Association, said in an email. “Many have even eliminated drug testing because finding employees is so difficult.”
Employers increasingly are turning to on-the-job training to find and retain employees — but that could be keeping wages down.
“In manufacturing and metals, especially, employers have been saying to me, ‘I could grow faster if I could find somebody, anybody,’ ” said North, the economist. “They’ll hire whoever they can find, pay them a low wage and train them up.”
Though last year brought what economists see as healthy job growth, it was still below 2016. The average number of jobs employers added each month in 2017 was 173,000, compared to the previous year’s 187,000.
The U.S. jobless rate dropped faster in 2017, though, and it’s expected to keep shrinking. Roughly 10,000 baby boomers turn 65 each day, and not enough young workers are cycling in to replace them.
One forecast from Goldman Sachs predicted the figure will dip to 3.5 percent by the end of next year — the lowest since 1969.
“Such a scenario would take the U.S. labor market into territory almost never seen outside of a major wartime mobilization,” Goldman Sachs chief economist Jan Hatzius wrote in November.
Economists can’t agree on why wages haven’t lifted with the demand for workers. As paid training spreads and more workers master skills that boost their productivity, paychecks should grow too, as companies compete for workers, said Josh Wright, chief economist at iCIMS, a hiring software company.
“We’ll see more turnover,” he said. “Employers will be poaching more workers, and if workers feel undervalued, thinking, ‘I should have gotten that raise,’ they’re going to make a move.”
That could be especially true in health care, which drove much of the job growth in 2017 and doesn’t appear to be slowing down.
Nurses, physician assistants, home health aides and physical therapists are among the country’s fastest-growing jobs as the population ages.
While manufacturing has enjoyed a four-month growth streak, reaching an eight-year high in November (125,000 jobs), analysts expect the sector to remain a sliver of the economy, compared to service-based work.
The economic data in 2017 sparked bipartisan cheers, but the hiring blitz hasn’t touched every corner of the country. West Virginia, where mining jobs have faded in recent decades, still has one of the highest jobless rates in the country (5.3 percent), and Ohio, which was hit hard by the manufacturing downturn, continues to grapple with a higher-than-average share of unemployed people (4.8 percent).
“We can’t just say everything is roses,” said Robert Frick, corporate economist at the Navy Federal Credit Union.
People in areas where opportunities have declined are showing less desire to pack up and leave. In 2017, only 11.2 percent of Americans relocated, the smallest share since the Census began tracking it in 1948. Of those who moved, fewer than a fifth said they left for an employment-related reason.