The U.S. economy added about 216,000 jobs in December – better than expected – and the unemployment rate was unchanged at 3.7%, according to the U.S. Bureau of Labor Statistics.
Segments that saw the strongest hiring included government, health care, social assistance and construction, while transportation and warehousing lost jobs.
The strong job growth reduces the likelihood of a Fed rate cut in the near-term.
As of the end of December, the number of unemployed persons was essentially unchanged at 6.3 million.
A year ago, the unemployment rate was 3.5% and the number of unemployed persons was 5.7 million.
About 1.2 million adult Americans – or 19.7% of all unemployed persons – were long-term unemployed (jobless for 27 weeks or more) in December.
The labor force participation rate decreased slightly to 62.5%.
The employment-population ratio also dropped slightly to 60.1%.
Wages continued to inch up slowly: In December, average hourly earnings for all employees on private nonfarm payrolls rose by 15 cents, or 0.4%, to $34.27.
Over the past 12 months, average hourly earnings have increased by 4.1%.
In December, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.3%, to $29.42.
First American Economist Ksenia Potapov notes that “the employment gains in previous months were softer than first reported based on revised numbers.”
“The change for October employment was revised down by 45,000 jobs, from an increase of 150,000 jobs down to 105,000 jobs, and the change for November was revised down by 26,000 jobs, from 199,000 jobs added to 173,000 jobs added,” Potapov explains in a statement. “The revised numbers suggest still strong, but cooling labor market conditions, a trend expected to persist in 2024. According to the Federal Reserve’s latest projections, the unemployment rate is expected to increase to 4.1 percent by the end of 2024.
“November’s JOLTS data suggested the same,” Potapov says. “Hires fell to the lowest level since 2020. Quits, a good indicator of worker confidence, fell below pre-pandemic levels. While the labor market remains strong, the pandemic distortions in JOLTS data are increasingly in the rear-view mirror.”
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