Here are the lead paragraphs from the Employment Situation Summary released this morning by the Bureau of Labor Statistics:
Total nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6 percent, the u.s. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing.
Today's report of 252K new nonfarm jobs in November was above the Investing.com forecast of 240K, and there were 50K in upward revisions to the two previous months (+32K in November and +18K in October). The unemployment rate dropped from 5.8% to 5.6%.
Here is a snapshot of the monthly percent change in Nonfarm Employment since 2000. I've included a 12-month moving average to help visualize the trend.
The unemployment peak for the current cycle was 10.0% in October 2009. The chart here shows the pattern of unemployment, recessions and both the nominal and real (inflation-adjusted) price of the S&P Composite since 1948.
Unemployment is usually a lagging indicator that moves inversely with equity prices (top chart). Note the increasing peaks in unemployment in 1971, 1975 and 1982. The inverse pattern becomes clearer when viewed against real (inflation-adjusted) S&P Composite, with its successively lower bear market bottoms. The mirror relationship seems to be repeating itself with the most recent and previous bear markets.
The next chart shows the unemployment rate for the civilian population unemployed 27 weeks and over. This rate has fallen significantly since its 4.4% all-time peak in April 2010. It dropped below 3% in April of last year and is now at its post-recession low of 1.8%.
The next chart is an overlay of the unemployment rate and the employment-population ratio. This is the ratio of the number of employed people to the total civilian population age 16 and over.
