U.S. Economy Adds 223,000 Jobs in Final Month of 2022
As Americans settle into the new year, a snapshot of the United States economy from the final month of 2022 has arrived. Today, a new jobs report was released, bringing stronger-than-expected results.
According to the latest Bureau of Labor Statistics report, the economy added 223,000 jobs in December 2022. That outpaces the 200,000 jobs that economists surveyed by MarketWatch had estimated. However, the number was the lowest in two years. Furthermore, November’s results were revised from the initial 263,000 to 256,000. Nevertheless, with the December results factored in, 2022 was the second-best year ever for the labor market. During the year, the economy added a total of 4.5 million jobs compared to a record-breaking 6.7 million jobs in 2021.
With the additional jobs, the unemployment rate ticked down to 3.5%, once again tying a more than 50-year low (the level has since been reached several times since 2019, but is the lowest recorded since 1969). On top of that, labor force participation inched up 0.1 points to 62.3%.
Looking at the industries where the largest jobs additions were scene during the month, leisure and hospitality, health care, construction, and social assistance all saw significant gains. In contrast, the information and professional/business services sectors shed jobs during the month.
In terms of wages, average hourly earnings increased by 9¢ in December, reaching $32.82. Year over year, average wages have risen 4.6%. That’s down from the 4.8% YOY growth recorded in November.
Offering commentary on the December jobs report, BMO Capital Markets senior economist Sal Guatieri said, “The U.S. jobs report had a little something for everyone: plenty more jobs and better job prospects for the unemployed, but also somewhat slower wage growth and a pullback in work hours that suggests the economy is losing steam.” Guatieri added, “Alas, a hawkish Fed will likely fret more about the ongoing tightness in labor markets.”
To Guatieri’s point, some observers do worry that the continued strong jobs results will lead to further Federal Reserve rate hikes after an aggressive 2022. Despite these fears, the Dow Jones Industrial Average closed up 700 points today following the report while the S&P 500 also gained more than 2%.
Overall, the December jobs report seems to be good news. At the same time, there’s plenty of uncertainty as 2023 gets underway. In particular, observers will certainly be paying attention to the last Consumer Price Index report of the year that will show how much inflation occurred in 2022. That report is expected to be released on January 12th. So, while this jobs report is one part of our economic puzzle, we’ll need to see what some other pieces reveal before we’ll have a better idea of where things are headed.