Unemployment Figures
Few economic data are as closely watched as measures of employment and unemployment. The Bureau of Labor Statistics releases monthly reports describing trends in the country’s jobs and workers. These reports are widely cited in financial markets, the news media, and by policymakers and analysts.
The latest employment figures show that the America statistics created 271,000 jobs in December, well ahead of expectations. However, the job gains were mostly in professional and business services, which is a sector that has been losing ground to more automated industries.
Adding to the positive signs, the unemployment rate remained unchanged at 3.7%. The labor force participation rate, which measures the number of people working or looking for a job, edged up slightly to 62.2 percent. This was higher than it was in November, but still lower than the pre-pandemic peak of 63.8% in April 2022.
Latest Employment and Unemployment Figures
A decline in the labor force participation rate is a concern, since it indicates that more people are dropping out of the workforce. Some of these people have left their jobs, while others have decided to retire or to focus on family responsibilities instead of seeking work. The labor force participation rate is expected to recover once the pandemic ends, but it will take time before the jobless rate goes back to pre-pandemic levels.
Wage growth is slowing from its recent peaks, but it remains higher than it was before the COVID-19 pandemic began. In December, wage and salary inflation increased by 4.3% compared to the same month last year. It was the lowest increase in four months, but still a solid gain.
Another indicator of the health of the job market is the quit rate. In December, it remained flat at 2.2% compared to November. This reflects the fact that many workers feel comfortable leaving their current positions, whether for better pay or to pursue other interests. The quit rate remained above its pre-pandemic level, but below the level of early 2022.
The latest employment report also contains details about the composition of the workforce. The share of workers employed in full-time jobs remained unchanged at 44%, but it was lower than the peak of 50% in March 2022. The share of workers in part-time jobs edged up, but it remained below the previous high of 31%.
The report also contained information on a variety of other topics, including the number of new hires and layoffs. The hiring rate was unchanged at 1.1%, while the layoffs rate fell to 0.7%. The average length of a layoff continued to be 33 days, although it was down from 39 days in November and 35 days in December. The number of new hires rose by a net 243,000 in December, while the number of layoffs was fewer than expected. The new hires rate was led by business services, professional and technical services, education, and health care. The rate of new hires rose in all regions except for the South, where it was unchanged.
