• US Non-farm Payroll Employment Rose 216k in December
• Revisions to the two prior months were negative, subtracting 71k from the previously reported figures
• Unemployment rate held at 3.7%
• Average hourly earnings up 0.4% MoM, 4.1% YoY
• Labor force participation rate fell to 62.5%
• US jobs data a setback but no game changer

US employers added 216,000 jobs to their payrolls in December, capping a year of exceptional gains for American workers despite substantial cooling in the labor market. The change in total nonfarm payroll employment for October was revised down by 45,000 to 105,000, and the change for November was revised down by 26,000 to 173,000. With these revisions, employment in October and November combined is 71,000 lower than previously reported. Overall, the labor market added 2.7mn jobs in 2023, with an average monthly gain of 225,000 jobs, down from 4.8mn, or 399,000 a month, in 2022.

Employment in service-based sectors, including government, health care, social assistance, and leisure and hospitality, continued to buoy the labor market in December. Government added 52,000 jobs, mostly at the local and federal level and in education. Health care added 38,000 jobs, reflecting both a backlog of demand from pandemic-era lockdowns as well as an increased need for care. Employment in social assistance rose by 21,000, mostly in services for individuals and families. The leisure and hospitality sector added 40,000 jobs, but has remains below its prepandemic level as employers have struggled to attract new workers. Meanwhile, transportation and warehousing lost 23,000 jobs, overwhelmingly in delivery roles. Sectors more sensitive to interest rates, such as information, financial activities, professional and business services and manufacturing, continued to see little to no job growth.

The unemployment rate was unchanged at 3.7%. The participation rate fell to 62.5% – the lowest reading since February 2023. The average hourly earnings were up 0.4% MoM and 4.1% YoY.

Source: BIMB Securities Research - 8 Jan 2024