December jobs report show strong growth
Jan 5, 2024, 6:54 AM | Updated: Feb 26, 2024, 12:13 pm
SALT LAKE CITY — The end of 2023 was better than economists thought it would be. The Labor Department showed 216,000 jobs were added in its December report. The number of jobs was not only higher than the previous month — but higher than expected.
A Utah economist’s reaction to the December jobs report
“The report shows the labor market is normalizing,” said Robert Spendlove, a senior economist with Zions Bank, on Utah’s Morning News.
Economists only expected around 170,000 jobs to be added, so this report shows more workers are coming back into the labor force.
“In the early part of the pandemic, employers laid off 22 million people, and then they had such a hard time getting them back,” said Spendlove. “It’s been really difficult. But now, what this report shows, is that the labor market is starting to normalize more.”
Good news, bad news
The unemployment rate didn’t shake — staying at its last reported rate of 3.7%.
Spendlove says that’s really remarkable because there is now two years the unemployment rate stayed under 4%, and that’s something that hasn’t happened since the 1960s.
“We are in a nice place with the unemployment rate at 3.7%,” said Caleb Silver, CEO of Investopedia to Utah’s Morning News. “That’s full employment in this country.”
Spendlove says the employment rate means employers are in control — and employees may have to make some concessions.
“We did see the revisions downward for October and November, which tells us the job market was maybe not as strong as we thought it was in the fall,” said Silver. “But in December, employers were holding on to more workers and adding more workers.”
Government, healthcare and social assistance were the biggest growing job areas.
Silver says average hourly earnings were rising again, which is bad news because the Fed had been trying to cool wage growth and hiring.
“It doesn’t look like it’s working,” said Silver. “Now, the concern is the Fed may not cut rates as soon as a lot of investors may have hoped.”
So what about that recession?
“The economy is going to slow in 2024, don’t make any mistake about it,” said Silver. “All those rate hikes in 2022 and 2023 have a lag effect.”
Silver says the economy will slow, and companies will, therefore, slow on their hiring.
He also says it doesn’t look like we’re having a recession right now.
“But just wait a couple of months and we’ll see what happens to consumer spending, personal income and the unemployment rate,” Silver said. “There’s a lot of projections the unemployment rate will jump to 4.5% by the end of this year. If that happens, we can look back and say, ‘Oh, that was the recession’.”
Silver says a lot of economists think we’ve been in rolling recessions.
