The U.S. added 216,000 nonfarm payroll jobs in December as the unemployment rate remained at 3.7%, according to Bureau of Labor Statistics (BLS) data released Friday; however, previous months’ jobs data was revised down.
Economists anticipated that the country would add 170,00 jobs in December compared to the 199,000 jobs that were added in November and that the unemployment rate would tick up to 3.8% from 3.7%, according to Reuters. December’s gains bring the total number of jobs added in 2023 to 2.7 million, far below the around 4.8 million that were added in 2022 as the country rebounded from losses taken during the COVID-19 pandemic. (RELATED: Businesses Barrel Headfirst Into A Tax Mountain As Trump-Era Cuts Taper Off)
Despite exceeding expectations for the month, the number of jobs added for the two previous months was revised down by 71,000, according to the BLS. October job gains were revised down from 150,000 to 105,000, and November’s job gains were revised down from 199,000 to 173,000.
Job growth in December was also concentrated in a few sectors, led by government employment, adding 52,000 jobs for the month, according to the BLS. The health care added the second most at 38,000 jobs in the month, followed by leisure and hospitality at 40,000 jobs added for the month.
If you believe JOLTS data, then look out: hiring in Nov fell to its lowest level since Dec ’17, excluding the one-month plunge in Apr ’20, and is now about 1.3 million below trend while layoffs are right at trend – firms are increasingly eliminating positions as vacancies arise: pic.twitter.com/q4eXh3nwpG
— E.J. Antoni, Ph.D. (@RealEJAntoni) January 4, 2024
The labor market could receive a boost in 2024 following recent projections from the Federal Reserve at its last Federal Open Market Committee meeting, where board members estimated that rates will be lowered to a median of 4.6% by the end of 2024, with lower rates freeing up credit and promoting job growth. The current federal funds rate has sat at a range of 5.25% and 5.50% since July 2023 in an effort to combat high inflation.
Inflation continues to remain elevated above the Fed’s 2% target, rising 3.1% year-over-year in November, having decelerated from its recent peak of 9.1% in June 2022.
Hiring may also have been hurt by poor holiday retail sales, which grew at a rate of 3.1% year-over-year from Nov. 1 to Dec. 24, matching inflation, as opposed to growth in 2021 and 2022 of 5.3% and 13.4%, respectively.
The BLS report follows a Thursday estimate from private payroll firm ADP that 164,000 private sector jobs were added. ADP also noted that annual pay was up 5.4% from the previous year, with persistent inflation under President Joe Biden curbing real gains.
The number of jobs added has been previously dominated by growth in the government, private education and health services, and leisure and hospitality sectors, accounting for 1,110,000 additional jobs from June to November, with only a net increase of 7,000 jobs among the other sectors.
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