The Biggest Lie In STRONG DECEMBER JOBS REPORT SURPRISES BUT OVERALL LABOR MARKET IS SLOWING. According to the Bureau of Labor Statistics‘ December jobs data, the U.S. economy continued to exhibit robust hiring growth as 2023 came to an end. Subsurfacely, however, the pattern continues to indicate a deceleration over time, indicating that there is still a strong possibility of an economic soft landing.
Economists emphasise the significance of examining data from more than one month, even if the December report revealed that the economy added 216,000 jobs—much more than the 160,000 that were anticipated. According to Jeffrey Roach, chief economist at LPL, “things are not as rosy as the headline number.”
The report’s specifics provide room for a 2024 interest rate reduction by the Federal Reserve. The bond market is pricing in a rate cut from the Fed as early as March. Overly robust job market conditions might postpone those cuts.
Important Statistics from the December Jobs Report
Compared to a downwardly revised 173,000 in November, the total nonfarm payrolls grew by 216,000.
From 3.7% in November, the jobless rate remained the same.
After increasing by 0.4% in November, the average hourly pay increased by 0.4% to $34.27.
Despite Surprising Increases in Employment, the Sum
As the head U.S. economist at Morningstar Preston Caldwell notes, employment growth is once again slowing down on a three-month basis. In comparison to 1.7% in the previous three months, nonfarm payroll growth decreased to 1.3% on an annualised basis for the final three months of December.
The economy created 164,000 new jobs in the private sector. Although it’s not exactly a gangbuster rate, Roach believes it’s a good rate.
Government and Healthcare Sector Hiring Is Slowing Down
The Bureau of Labor Statistics (BLS) indicates that hiring in the government, healthcare, social assistance, and construction sectors increased in December. There were losses in the transportation and warehousing industries.
But according to Caldwell, recruiting in the healthcare industry has decreased during the last three months, from a 4.0% annualized growth rate to 2.8%.
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