US Job Gains Slow to 223K in December Hitting 2-Year Low

The U.S. economy added 223,000 non-farm jobs in December. This was ahead of consensus estimates but lower than the average monthly gain of 375,000 recorded for all of 2022, and also marked the fourth consecutive month of declines and the lowest month tally in job creation in two years, per a Friday (Jan. 6) report from the U.S. Bureau of Labor Statistics (BLS).

The top four sectors that saw job gains in December were leisure and hospitality, healthcare, construction and social assistance.

Leisure and hospitality employment rose by 67,000, with food services and drinking places adding 26,000 jobs; amusements, gambling and recreation adding 25,000 and accommodation adding 10,000.

“Employment in the industry remains below its pre-pandemic February 2020 level by 932,000, or 5.5%,” the BLS said.

Healthcare employment was up by 55,000, including additions of 30,000 in ambulatory healthcare services, 16,000 in hospitals and 9,000 in nursing and residential care facilities.

“Job growth in healthcare averaged 49,000 per month in 2022, considerably above the 2021 average monthly gain of 9,000,” the BLS said.

Construction added 28,000 jobs in December, with specialty trade contractors adding 17,000.

The fourth sector that saw notable job growth last month was social assistance, which was up by 20,000 jobs, with individual and family services accounting for half that advance.

At the same time, two sectors that had shown big job losses in November made small gains in December. Retail trade picked up 9,000 jobs in December, while transportation and warehousing added 5,000. In November, those sectors had lost 30,000 jobs and 15,000 jobs, respectively.

“Over the month, employment showed little change in other major industries, including wholesale trade, information and financial activities,” the BLS said.

The BLS report also found that the unemployment rate edged down to 3.5% in December and stood at the lower end of the narrow range of 3.5% to 3.7% it has been within since March 2022. The number of people who were unemployed edged down to 5.7 million.

This unemployment rate was the lowest seen in over 50 years, Curt Long, chief economist and vice president of research at the National Association of Federally-Insured Credit Unions (NAFCU), said in a statement provided to PYMNTS.

“Underlying details were also positive, with labor force participation picking up and wage growth decelerating,” Long said in the statement. “This is an unambiguously positive report that has the potential to set us on a path toward a recession free 2023.”

The government report comes on the heels of Amazon’s announcement this week that its staff reductions would top 18,000. The report also will keep focus on the Federal Reserve and its rate increase policy aimed at dampening inflation without sending the economy into recession.

The latest inflation data for December is set to be released next Thursday, January 12, with economists predicting the headline rate will slip to 6.6% from 7.1% in November and a 9.1% peak reported last June.