The U.S. Job Creation Index ended 2014 at plus 27 in December, eight points higher than where it started in January. The index has remained between plus 27 and plus 28 since May, apart from a slightly higher reading in September.
The index gained ground through much of the first half of 2014, increasing two points each month until May, after which it remained flat. For the last eight months, it has been in a narrow range.
The Job Creation Index peaked in September at plus 30, reaching a six-year high, and giving hope that the index's upward climb would continue in the final quarter of the year. But that did not happen, and the index from October through December retreated to its mid-2014 range of plus 27 to plus 28, suggesting it may have plateaued. The current reading for December is one point lower than November's plus 28.
Gallup's Job Creation Index is a measure of net hiring activity in the U.S., with the December average based on a nationally representative sample of nearly 15,000 full- and part-time workers. December's plus 27 score is based on 39 percent of employees saying their employer is hiring workers and expanding the size of its workforce, and 12 percent saying their employer is letting workers go and reducing the size of its workforce. Forty-two percent reported no changes in staffing in their workplaces.
The Job Creation Index among those working in nongovernment jobs, which make up the bulk of employment in the U.S., was plus 28. Forty percent of nongovernment workers said their employers are hiring, while 12 percent said they are letting people go.
Meanwhile, government net hiring remained flat in December, at plus 21. Government employees generally have been less positive than nongovernment workers about job activity in their places of employment. In December, 36 percent of government workers reported staff increases, while 15 percent reported staff reductions.
For the bottom line, excluding September's brief peak, the Job Creation Index has essentially remained at the same level for the past eight months, suggesting the job market plateaued in the latter half of 2014.
Still, the score for the final month of the year is markedly higher than in previous Decembers, which reflects the index's long-term recovery since the recession that sent it plummeting in 2008 and 2009.
Gallup's Job Creation Index is based on a question that Gallup tracks daily, asking a nationally representative sample of 500 to 600 working adults, aged 18 and older, and reports monthly based on approximately 14,000 interviews. Gallup asks its sample of employed Americans each day whether their companies are hiring new people and expanding the size of their workforces, not changing the size of their workforces, or letting people go and reducing the size of their workforces. The resulting index -- computed on a daily and a weekly basis by subtracting the percentage of employers letting people go from the percentage hiring -- is a real-time indicator of the nation's employment picture across all industry and business sectors. The survey is conducted with respondents contacted on landlines and cellphones.
The hiring and firing trends that are the basis for Gallup's Job Creation Index provide key new insights into the potential future direction of job market conditions. Gallup's Job Creation Index provides information not available in some government indicators. For example, the government's weekly new jobless claims measure only reflects workers filing for benefits, yet not everyone who is laid off files for unemployment. The index may also detect hiring trends days or weeks before they are manifested in the official unemployment rate or other lagging indicators. Gallup has tracked its Job Creation Index daily since January 2008.
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