2017 was a strong year for the U.S. economy, and the job market showed continued signs of growth. Unemployment rates fell throughout the year, as the headline numbers released by the Bureau of Labor Statistics showed that the number of unemployed workers declined even as labor force participation remained relatively steady.
More interesting, though, are the numbers beyond the headlines. A closer look at the BLS employment report reveals some interesting trends that have implications both for workers and for investors. In particular, strength in certain areas hid weakness in others, reflecting the hot and cold parts of the broader U.S. economy that could persist in 2018 and beyond.
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Labor market statistics for 2017
The rise of the professional class
The most striking statistic over the past year shows the rise of management, professional, and related occupations, both generally and in relation to the rest of the labor force. Even though the overall economy only saw 1.8 million new jobs during the year, the number of management and professional jobs jumped by nearly 2.1 million.
In particular, professional and related occupations saw a 1.5 million rise, keeping the unemployment rate for that group at an extremely low 2.1%. Unemployment for management, business, and financial operations occupations was even lower at 2%, with almost 550,000 new jobs created during the year.
The fall of the service and office class
With professional jobs on the rise, other occupations had to suffer, and most of the decline in the U.S. job market came in the service area and the sales and office occupation group. Service occupation employment was down more than 600,000 jobs during the year, although the number of unemployed workers also fell as laborers simply left the industry.
Among sales and office workers, sales and related occupations eased lower slightly, but the real hit came to office and administrative support, where 300,000 jobs disappeared. Again, though, the size of the labor force pursuing those jobs also decreased, and that led to relatively attractive unemployment rates of 3.5% for the office and admin group.
A big rebound in natural resources
Natural resources jobs made a big rebound during 2017, as one might expect given the rebound in the energy industry following a devastating couple of years previously. Overall job counts were up by nearly 650,000 during the year, with about 400,000 of those jobs going to the construction and extraction group that would include oil and gas-related occupations.
Farming, fishing, and forestry also saw an interesting rebound. Nearly 200,000 jobs were created there, although unemployment rates in that sector remain the highest in the labor force at 15%.
Some of the best gains in average weekly earnings also came from natural resources jobs. Mining and logging saw average earnings climb by nearly $50 per week to just under $1,300, while construction saw similar-sized increases to about $1,075 per week. Only the highest-paid group measured by the BLS, utility workers, saw declines in average weekly earnings, and they remain attractive at about $1,525 per week.
What will 2018 bring?
The broader trends that created these labor market changes in 2017 look poised to continue in 2018. Changes to tax rates will continue to make professional jobs look more attractive, spurring greater interest from the labor force in such positions. Gains in energy and commodity prices should keep the natural resources industries strengthening, spurring greater hiring in those areas as well. And as we've seen from recent brick-and-mortar retail woes, the services industries can expect ongoing shifts to reflect how consumers buy and sell the goods and services they need.
For workers, getting the training you need to assume managerial responsibility has the potential to pay off well in many professions. Investors will want to keep a close eye on labor costs, but in general, higher job numbers suggest rising opportunity for key industries in 2018 and beyond.
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