WASHINGTON–Slowing job growth can be seen in new data for the end of 2022, even though the overall numbers show unemployment at its lowest point in a half-century.
The Labor Department reported the economy added 223,000 jobs in December, in line with what many economists have forecast as the Fed’s efforts to tame inflation by raising rates has its effect.
The new data show total job creation for the year was 4.5 million as the economy continued its rebound from the pandemic.
“The labor market ended 2022 on a high as the unemployment rate fell to its lowest level in over 50 years,” said NAFCU Chief Economist and VP-Research Curt Long. “Underlying details were also positive, with labor force participation picking up and wage growth decelerating. This is an unambiguously positive report that has the potential to set us on a path toward a recession free 2023."
As CUToday.info reported earlier, employers have been reluctant to let employees go, with the gap between the number of available workers and listed jobs far larger than its historical average.
The share of people working or looking for work ticked up slightly to 62.3% in December — about where it has been all year — as more than 400,000 people entered the labor force, according to the Labor Department.
'Still Robust'
"The December jobs report showed that the U.S. economy added 223,000 jobs, a slower pace relative to previous months but still robust considering the overall labor market condition. The total employment level increased by 3.2 million in 2022," said CUNA Senior Economist Dawit Kebede. "The unemployment rate declined to 3.5%.Labor force participation increased slightly by one-tenth of a percentage point, adding 440,000 people. The average hourly earnings increased by 0.3% - a slowdown from previous months. This is equivalent to an annualized rate of 3.6% growth, reducing the probability of wage-price spiral. Average hourly earnings have been consistently at or above 5% in previous reports.
"This report is encouraging for the Federal Reserve, which was expecting a slack in the labor market, to bring inflation down to its target level," Kebede continued. "The rate of job increases is slowing down. Big tech firms are announcing layoffs which will lead to further cooling of the labor market. The wage increase pressure on inflation is also easing."