by Calculated Risk on 1/09/2026 09:20:00 AM
The headline jobs number in the December employment report was slightly below expectations, however October and November were revised down by 76,000. The unemployment rate decreased to 4.4%.
Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.
The 25 to 54 years old participation rate was unchanged in December at 83.8%% from 83.8% in November.
The 25 to 54 employment population ratio increased to 80.7% from 80.6% the previous month.
Average Hourly Wages
The graph shows the nominal year-over-year change in “Average Hourly Earnings” for all private employees from the Current Employment Statistics (CES).
Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.8% YoY in December, up from 3.6% YoY in November.
From the BLS report:
“The number of people employed part time for economic reasons, at 5.3 million, changed little
in December but is up by 980,000 over the year. These individuals would have preferred
full-time employment but were working part time because their hours had been reduced or they
were unable to find full-time jobs.“
The number of persons working part time for economic reasons decreased in December to 5.34 million from 5.49 million in November. This is well above the pre-pandemic levels and near the highest levels since mid-2021.
These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 8.4% from 8.7% in November. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is well above the 7.0% level in February 2020 (pre-pandemic).
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 1.95 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.91 million in November.
This is above pre-pandemic levels.
Summary:
The headline jobs number in the December employment report was slightly below expectations, however October and November were revised down by 76,000. The unemployment rate decreased to 4.4%.
This was another weak employment report.
