Red flags dampened enthusiasm over December’s job growth, which increased more than expected, and the unchanged unemployment rate, data released Friday by the U.S. Bureau of Labor Statistics (BLS) show.
While total nonfarm payroll employment increased by 216,000 from November, more than the 170,000 expected, the growth was lower than that of past months.
Payroll employment rose by 2.7 million in 2023 (an average monthly gain of 225,000), less than the increase of 4.8 million in 2022. 2022’s average monthly gain of 399,000 is 183,000 higher than December’s increase.
Likewise, the unemployment rate remained at a seasonally-adjusted 3.7% in December, but was above the 3.5% level of a year ago (December 2022). December’s number of unemployed persons was 6.3 million, unchanged from November, but higher than year-ago, when 600,000 fewer people were unemployed (5.7 million).
The December report contains some significant red flags:
What’s more, rising employment in government accounted for a quarter (24%) of December’s job growth. Government, leisure/hospitality, and health care comprised 60% of 216,000 jobs added:
Meanwhile, employment in transportation and warehousing declined by 23,000 in December. Since reaching a peak in October 2022, employment in transportation and warehousing has decreased by 100,000.
The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.3 hours in December.
Among the major demographic groups, the unemployment rate rose for adult women, Whites and Hispanics, but fell for other cohorts, compared to November:
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GLOSSARY
Employed: BLS defines employed Americans as those who, during the reference week, did some work for pay or profit, or did at least 15 hours of unpaid work in a family-operated business.
Unemployed: People with no job, but who are looking for employment.
Participating in the labor force: People who were either employed or unemployed -- they either had a job or were actively looking for one during the last month.
People not in the labor force who want a job: These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.