Private sector payrolls decline for the first time since 2003

The Bureau of Labor Statistics released the December employment report a short time ago. Nonfarm payrolls rose by 18,000, the smallest gain since 2003, and the unemployment rate rose from 4.7 to 5.0 percent.
Job gains in several service industry categories such as professional and business services along with education and health services were largely offset by job losses in construction and manufacturing.

Private sector payrolls (excluding the 31,000 new government jobs) fell by 13,000, the first decline since June of 2003.
Employment in retail trade (within the trade, transportation, and utilities category) fell by 24,300 led by a 7,900 drop at clothing and clothing accessory stores.

Within the construction category, job losses were spread across all five subcategories - losses were seen for both residential and nonresidential construction as well as for builders and for smaller specialty trade contractors.
With the prospect of smaller employment gains or outright job losses at the state and local government level due to reduced tax revenues, the most recent trend in private sector employment bodes ill for the labor market in 2008.