The U.S. economy added 216,000 new jobs in December 2023, according to the Bureau of Labor Statistics (BLS). That was better than the 170,000 predicted by economists and more than November’s gain.
Job gains in both October and November of last year were revised downward. Employment in those months is now 71,000 lower than previously reported, according to the agency.
The latest employment figures showed no signs of a sharp slowdown in the U.S. economy.
In 2023, the national economy created nearly 2.7 million new jobs, down from the roughly 4.8 million positions added in 2022.
The December 2023 unemployment rate was unchanged at 3.7 percent, outpacing the consensus estimate of 3.8 percent. However, the labor force participation rate, defined as the proportion of the civilian working-age population that’s either employed or searching for a job, was 62.5 percent, down from 62.8 percent. This was the lowest level since February 2023, down by 676,000 on a monthly basis.
Average hourly earnings edged up last month, rising to 4.1 percent year over year. Monthly average hourly earnings were unchanged at 0.4 percent, which topped the market forecast of 0.3 percent.
Job gains were led by the government (52,000), leisure and hospitality (40,000), health care (38,000), social assistance (21,000), and construction (17,000). Manufacturing saw little increase, adding just 6,000 positions.
Positions in transportation and warehousing fell by 23,000.
November job gains were revised down to 173,000 from the initially reported 199,000. October gains were also adjusted down by 45,000 to 105,000.
“There was a net downward revision to the prior two months of [71,000] jobs, so the U.S. labor market cooldown trend remains intact,” Scott Anderson, chief U.S. economist at BMO Bank, wrote in a note.
“The three-month moving average of payroll growth moderated to [164,000] per month, down from [180,000] in November.”
He believes that continued low levels of unemployment will make it difficult for the Federal Reserve to lower interest rates in the first quarter.
Overall, 2023 was the first normal employment trend year since the COVID-19 pandemic, said Andrew Crapuchettes, CEO of job website and recruitment firm RedBalloon.
“The labor market is finally recovering from the gut punch delivered by the COVID-19 pandemic,” he said in a statement to The Epoch Times. “According to RedBalloon research, the pandemic cost the U.S. economy 4 million jobs over the last three years. This also explains why job postings remain stubbornly high despite a tight labor market.”
Market Reaction
U.S. stocks slid on the news but settled slightly higher by the end of the day. The Dow rose 0.07 percent, the S&P 500 gained 0.2 percent and the Nasdaq Composite added 0.09 percentTreasury yields have reignited their upward push, even with the Federal Reserve’s rate cuts looming. The benchmark 10-year yield soared to 4.08 percent after the payrolls data.
A Week of Labor Data
The BLS published the November Job Openings and Labor Turnover Survey (JOLTS) data, showing that the number of job openings declined by 62,000 to 8.79 million. This was down from a downwardly revised 8.852 million. The reading also fell short of the consensus estimate of 8.85 million.This was the lowest level since March 2021 and represented the third consecutive monthly drop in employment opportunities.
The number of job quits tumbled by 157,000 to 3.471 million, the lowest level since February 2021. Experts assert that this could be a signal that more workers are becoming less confident about resigning and searching for other positions in the present labor market.
But Jan. 4 provided some evidence that the U.S. labor market might remain solid.
According to the ADP National Employment Report, the private sector added a higher-than-expected 164,000 positions in December, up from a downwardly adjusted 101,000 in November. Pay growth also slowed as job-stayers recorded a 5.4 percent pay increase, and job changers posted an 8 percent earnings boost.
ADP Chief Economist Nela Richardson noted that the current job market is beginning to mirror the pre-crisis economy.
“We’re returning to a labor market that’s very much aligned with pre-pandemic hiring,” Ms. Richardson said. “While wages didn’t drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared.”
Additionally, layoffs appeared to have slowed to finish 2023.
The Challenger Report highlighted that U.S.-based employers announced plans to slash 34,817 jobs in December 2023, which was the second-lowest print of the year. Still, companies announced efforts to cut 721,677 positions in 2023, a 98 percent increase from the previous year and the highest total since 2009 (excluding during the COVID-19 pandemic). This was led by technology (168,032), retail (78,840), health care (58,650), and finance (57,052).
“Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job seekers and cuts will continue in Q1, though at a slower pace,” Andy Challenger, senior vice president of Challenger, Gray & Christmas Inc., said in a statement.
Labor Market Concerns
Despite the robust jobs arena over the past few years, many people are worried that the labor market will soften in 2024.MyPerfectResume’s 2024 Workplace Trends Survey discovered that 85 percent of workers fear that they will lose their jobs this year. Reasons range from a recession to the growth of artificial intelligence.
“The 2024 workplace landscape promises a dynamic blend of challenges and opportunities. To succeed, workers and employers alike must recognize that adaptability is the name of the game while striking a balance between addressing challenges and seizing opportunities will determine the winners,” Kellie Hanna, career expert at MyPerfectResume, said in a statement. “Navigating this complex terrain will demand more than just resilience; it will require a high degree of professionalism and a strategic vision.”
The Federal Reserve Bank of New York’s Survey of Consumer Expectations in November showed that the mean probability that the U.S. unemployment rate would be higher a year from now stood at 38.4 percent, up from the 2023 low of 36.7 percent in July.
Survey findings also highlighted that the mean probability of finding employment in the next three months if a job were lost today slipped to 55.2 percent.
Based on the updated Summary of Economic Projections, U.S. monetary authorities anticipate that the jobless rate will be higher, climbing to 4.1 percent and staying there in 2024, 2025, and 2026.
