Monday, January 9, 2023

December Jobs Report Weakest of 2022

December Jobs Report Weakest of 2022

AP Photo/Michael Conroy, File

The U.S. economy added 223,000 jobs in the final month of 2022 according to the latest data released by the Bureau of Labor Statistics on Friday — beating the 200,000 jobs expected but still the weakest report of the last year — bringing the unemployment rate to 3.5 percent from 3.7 percent in November. 

The perhaps good looking headline numbers, however, don't tell the whole story and don't make up for the more negative information contained deeper in the December jobs report. 

Despite some increase to the labor force participation rate, it remains at just 62.3 percent — still one full percent below its pre-COVID level in early 2020.

And, as was the case throughout 2022, December showed that Americans' wages — even with growth — were outstripped by inflation that has remained elevated despite the Biden administration's attempts to deny price increases and then pass blame for the economic hardship once it became impossible to brush off. 

Month-over-month wage growth came in at 0.9 percent for December, advancing 4.6 percent in 2022, but still lagging behind the 2022 inflation rate of some 7.1 percent. That puts Americans in the bind of having to deal with a greater than two percent cut to their real wages. 

The new jobs in December's report — which, like all such economic releases, is backward-looking data that might not account for the full number of layoffs that were announced to close out the year in mid-to-late December, showed added positions in a number of economic sectors.

Leisure and hospitality added 67,000 jobs, food services and drinking places hired 26,000, and amusements, gambling, and recreation grew by 25,000. The health care industry saw growth as well, adding 30,000 jobs in ambulatory services and 16,000 in hospitals. 28,000 construction jobs were added in December, while social assistance added 20,000. 

As noted earlier, December's employment report was the weakest of the year:

  • January 2022: 467,000 jobs added
  • February 2022: 678,000 jobs added
  • March 2022: 431,000 jobs added
  • April 2022: 428,000 jobs added
  • May 2022: 390,000 jobs added
  • June 2022: 372,000 jobs added
  • July 2022: 528,000 jobs added
  • August 2022: 315,000 jobs added
  • September 2022: 263,000 jobs added
  • October 2022: 261,000 jobs added
  • November 2022: 263,000 jobs added
  • December 2022: 223,000 jobs added

That reality adds to growing concerns about what the lasting impact of the Biden administration's refusal or failure to address inflation — and the Federal Reserve's resulting aggressive interest rate hikes — will be more broadly. It also suggests that chances of a "soft landing" as the economy is strangled to bring inflation down are further decreasing. 

The Fed said earlier this week that it anticipated no interest rate cuts through 2023, despite rates already being hiked to their highest level since the financial crisis of 2008.

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