Jamie Cox, managing partner at Harris Financial Group, expects the latest jobs numbers to show signs of “moderation.”
Employment growth continued at a healthy pace in December, and the labor market ended 2023 on a solid footing.
The Labor Department's monthly payroll report released on Friday showed employers added 216,000 jobs in December, more than the 170,000 increase expected by economists polled by Refinitiv. The unemployment rate remained unchanged at 3.7%.
The report also included a significant downward revision to employment growth over the past two months. The government said employment figures for October and November were revised downward by a total of 71,000 jobs to 105,000 and 173,000 respectively, suggesting the labor market is weaker than previously seen. .
In total, the economy added about 2.7 million jobs in 2023, down from 4.8 million in 2022.
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“The labor market and the economy are normalizing and we're in a healthy situation, not too hot and not too cold,” said Sonu Varghese, global macro strategist at Carson Group.
In another example of the strength of the economy, average hourly wages, a key indicator of inflation, increased by 0.4% in the month, maintaining a 4.1% increase compared to the same period last year. Both of these numbers were slightly above expectations.
of federal reserve said it is closely monitoring the report for evidence that the labor market is finally cooling down after nearly two years of rate hikes. Policymakers voted last month to keep interest rates unchanged for the third time in a row, signaling they may start cutting rates soon amid signs that the economy is gradually slowing.
Workers assemble the frame of a home under construction at the Cold Spring Barbera Homes subdivision in Loudonville, New York, Wednesday, Nov. 8, 2023. (Angus Mordaunt/Bloomberg via Getty Images/Getty Images)
“This data is consistent with the resilience of the labor market and the Fed's ability to control inflation and deliver the aggressive rate cuts that markets are pricing in,” said Samir Samana, global market strategist at Wells Fargo Investment Institute. It's going to be very difficult.”
The labor market has remained historically tight over the past year, contrary to economists' predictions of an economic slowdown. But after growing at a breakneck pace last year, there are some signs that cracks are starting to appear.
This is a developing story. Please check back for the latest information.
