The Jobs Report – December 2023

Highlight

The December jobs report reported that the economy added 216K jobs, beating expectations. This is a significant increase from last month’s revised total of 173K, but there was a 71K net downward revision to October and November, resulting in weaker numbers for the quarter. Despite the good December data, the three-month average dropped from 180K to 165K. Private payrolls increased in December from 150K last month to 164K with manufacturing adding 6k.

What You Should To Know:

• The household survey reported a job loss of 683K with the labor force shrinking by 676K leaving the unemployment rate unchanged at 3.7%.
• The majority of the job gains came from three sectors. Education and health services added 74K jobs, health care added 59, and government 52K. Transportation and warehousing lost 23K. Temporary help services, a leading indicator, lost 33K.
• The index of aggregate hours worked dropped by -0.2 in December, falling two out of the last three months, this is not a positive sign for Q4 economic growth.
• The headline numbers of the report combined with the steady unemployment rate look positive. However, the details of the report are much more uneven. As noted above, the household reported a significant drop in employment and the labor force. Neither of these are good signs, although the household survey can be volatile and seasonals could have impacted the numbers over the past several months. The significant downward revisions to the monthly job totals are not positive either. The inconsistencies in this report may be because of the lingering effects of the UAW strike last fall; we will need to see how the coming data shakes out.
• Overall, this report will probably keep the Fed on hold from any rate moves in the near term.