With companies adding 216,000 jobs in December, the labor market continued a resilient path, indicating that the economy is still growing quickly, even though hiring may slow down as rising borrowing prices reduce consumer demand for goods and services.
The U.S. Bureau of Labor Statistics released its employment report on Jan. 5, revealing that total non farm payroll employment increased while the U.S. maintained a 3.7% unemployment rate.
According to the report, the job gains were particularly notable in the government, health care, social assistance, and construction sectors, while transportation and warehousing experienced job losses.
In the household survey, the unemployment rate remained at 3.7%, with 6.3 million unemployed. Although the figures were slightly higher than the previous year, the rates for various demographic groups, including adult men and women, teenagers, whites, Blacks, Asians, and Hispanics, showed minimal changes.
The long-term unemployed, defined as those jobless for 27 weeks or more, accounted for 19.7% of all unemployed persons in December. The labor force participation rate and the employment-population ratio both decreased by 0.3 percentage points in December.
Additionally, the number of people employed part-time for economic reasons remained stable, but it increased by 333,000 over the year. Those not in the labor force but wanting a job rose to 5.7 million, marking an increase of 514,000 over the year.
“This morning’s report confirms that 2023 was a great year for American workers. The economy created 2.7 million new jobs in 2023, a year when the unemployment rate was consistently below four percent more jobs than during any year of the prior Administration,” President Biden said in a statement. “The strong job creation continued even as inflation fell to the pre-pandemic level of two percent over the last six months, and key prices have fallen over the last year for a gallon of gas, a gallon of milk, toys, appliances, car rentals, and airline fares. American workers’ wages and wealth are higher now than before the pandemic began, adjusting for inflation.”
The report highlighted that payroll employment rose by 2.7 million in 2023, with an average monthly gain of 225,000, a decrease from the 2022 average monthly gain of 399,000.
Government employment saw an increase of 52,000 jobs in December, continuing an upward trend in local and federal government jobs. Healthcare added 38,000 jobs, with ambulatory healthcare services and hospitals experiencing notable gains. Social assistance employment rose by 21,000, primarily in individual and family services.
Construction employment increased by 17,000 last month, with nonresidential building construction contributing to the rise. However, transportation and warehousing experienced a decline of 23,000 jobs, particularly in couriers and messengers.
Employment in leisure and hospitality changed little, rising by 40,000 jobs last month. Retail trade employment also saw little change, with a slight increase of 17,000 jobs in December. Professional and business services employment increased by 13,000 jobs.
Average hourly earnings for all employees on private non farm payrolls rose by 0.4% to $34.27 last month. Over the past 12 months, average hourly earnings have increased by 4.1%. All employees’ average workweek increased by 0.1 hours to 34.3 hours.
Overall, financial analysts said the employment report suggests a positive trend in the U.S. labor market, with moderate job gains and a stable unemployment rate.
“I won’t stop fighting for American workers and American families. I know that some prices are still too high for too many Americans, and I am doing everything in my power to lower everyday costs for hard-working Americans—from bringing down the price of insulin, prescription drugs, and energy to addressing hidden junk fees companies use to rip you off to calling on large corporations to pass on savings to consumers as their costs moderate,” Biden said. “And I will continue opposing efforts by Congressional Republicans to shower massive giveaways on the wealthy and big corporations, cut Medicare, Medicaid, and Social Security, and block us from lowering costs for American families.”
