Unemployment Rate Drops to 3.5%
Jobs Growth
Although the pace of job creation continued to slow in December, growth of 233,000 new jobs represents strong performance in the employment market. December activity brought the annual gain for 2022 to 4.5 million new jobs, representing average monthly growth of 375,000 jobs.
Top Industries
Job gains were most evident in the leisure and hospitality sector, healthcare, construction, and social assistance.
Unemployment
The unemployment rate dipped back to 3.5% in December.
Wages
Average hourly earnings saw a rise of 0.3% in December, contributing to an average annual increase of 4.6% for the year.
Work Week
The average work week in December was 34.3 hours, representing a pullback from recent months.
Temporary Job Trends
Hiring activity slowed further in the temporary help sector, which saw a loss of 35,000 jobs in December.
What Does It All Mean?
The December jobs report failed to meet expectations but in both good news/bad news ways. Job growth was greater than anticipated, and unemployment fell further than predicted. At the same time, wage growth was slower than expected for the year, failing to breach the 5.0% mark.
While job growth is slowing, it is still strong in comparison to pre-pandemic conditions. However, solid jobs creation, combined with a lowering unemployment rate, does not reflect the inflation-fighting strategy of the Federal Reserve. Continued talk of layoffs by well-known brands and major employment sectors, such as tech, make people nervous about the possibility of a recession and a cutback in jobs.
"We’ve seen people proactively concerned about the ‘R’ word," said Rebecca Rogers Tijerino, Spherion president. "If they’re not on firm ground with their current employer, they’re looking to make a change."
Read Spherion President Rebecca Rogers Tijerino's thoughts about the December jobs report in The New York Times.
Despite these mixed signals, demand for labor remains strong across the business sector. In fact, the National Federation of Independent Business reports that 17% of small businesses plan to create new jobs in the first quarter of 2023. Job candidates may be more cautious about making a move, but there are still more than 10 million open jobs in the nation, offering lots of possibilities for candidates and continuing challenges for employers to secure the best talent in a highly competitive market.
Sources: U.S. Bureau of Labor Statistics (BLS), ABC News, CNBC, Staffing Industry Analysts, American Staffing Association, National Federation of Independent Business, USA Today, Reuters, MarketWatch.
