Article Summary –
The US economy added 216,000 jobs in December, with the unemployment rate remaining at 3.7%. Sectors that saw significant job growth include healthcare, local government, construction, and social assistance. Wages reportedly outpaced inflation, with average hourly earnings increasing by 15 cents and rising by 4.1% over the past year, significantly higher than the 3.1% inflation rate.
December Jobs Report: Unemployment Rate Remains Low
The December jobs report revealed an unchanged unemployment rate of 3.7%, with 216,000 jobs added predominantly in sectors such as health care, local government, construction, and social assistance, according to the Bureau of Labor Statistics. Democrats seized the announcement to voice their concerns over a possible government shutdown due to disputes over U.S.-Mexico border policy.
President Joe Biden hailed the data, stating that 2023 was an excellent year for American workers. Rep. Bobby Scott (D-VA) concurred, arguing against any actions that could jeopardize economic progress.
Wage Growth Surpasses Inflation, Providing Economic Relief
Wage growth outpaced inflation with a 4.1% increase in average hourly earnings over the past year, surpassing the 3.1% inflation rate. Economists from Moody’s Analytics and the Economic Policy Institute suggest that this trend is boosting real purchasing power, especially among lower-wage workers.
Consistent Job Growth in Health Care and Government Sectors
The government workforce increased by 52,000, primarily in local governments, with health care adding 38,000 jobs. Economists expect these sectors to continue growing, with the aging U.S. population driving job growth in health care.
A Slowing Job Market: Expert Observations
Despite the solid job market, economists note signs of a slowdown, as indicated by a drop in the labor force participation rate and employment-population ratio. Both measures fell 0.3% in December. However, experts stress that unemployment remains low, emphasizing the general resilience of the job market.
State Pay Trends Highlighted by ADP Data
Data released by ADP, pointed to cooling pay growth in December. States such as Montana and Idaho saw higher pay increases of 8.2% and 7.5% respectively. While the recovery has seen higher pay growth for lower-paid workers, recent trends indicate a slowdown in pay gains and a falling job-change pay premium.
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