Current:Home > MyThe U.S. job market is still healthy, but it's slowing down as recession fears mount-LoTradeCoin
The U.S. job market is still healthy, but it's slowing down as recession fears mount
View Date:2024-12-23 19:45:52
The U.S. job market closed out 2022 on a high note.
Employers added 223,000 jobs in December, capping a year in which the economy added 4.5 million jobs, more than refilling the deep hole left by the coronavirus pandemic two years earlier.
While some big companies have announced job cuts in recent weeks, the overall labor market remains tight. The unemployment rate in December inched down to 3.5%, matching a half-century low.
Demand for workers remained remarkably strong throughout the last year, even as the Federal Reserve was aggressively trying to slow the economy by raising interest rates, in an effort to fight inflation.
"The labor market's been this calm eye in the center of the storm," says Dave Gilbertson, vice president of UKG, which makes shift-scheduling software.
Hiring has slowed since the first half of last year, when employers were adding more than 400,000 jobs a month, on average. And a further slowdown is expected, as businesses brace for a possible recession.
"They're kind of pumping the brakes a little bit on hiring," Gilbertson says.
Businesses are holding onto their workers
So far, there's little evidence of widespread job cuts, despite high-profile layoff announcements this week from companies like Amazon and Salesforce. New claims for unemployment benefits remain at historically low levels.
Some businesses say they're reluctant to let employees go, even if demand drops, after struggling for much of the last two years to find enough workers.
More than 400,000 workers entered or re-entered the workforce last month, and the share of adults working or looking for work inched up by a tenth of a percent.
Many of the high-tech businesses that are cutting jobs had expanded rapidly in recent years.
"These firms benefited from a pandemic economy where people were at home, they were hungry for the Internet and hungry for devices, and spending was directed towards the services and the goods that tech was providing," says Nela Richardson, chief economist at the payroll processing company ADP.
"Now we're coming to a point where consumer spending has shifted again," she says. "Tech is responding by pulling back."
The Fed would welcome a cooler labor market
Financial firms are also cutting back on hiring, in the face of rising interest rates. And factories have scaled back hiring as well. Manufacturers added just 8,000 jobs in December, a quarter of the monthly average last year.
"We're waiting for demand to come back," says Tim Fiore, who conducts a monthly survey of factory managers for the Institute for Supply Management.
"The first half of 2023 is going to be sluggish," Fiore says. "But the second half of 2023 is going to be pretty strong."
The Federal Reserve would welcome some slowdown in hiring, especially if it helps to keep a lid on wage gains. The central bank is worried that rapid pay increases could add to inflation, especially in labor-intensive service businesses.
Average hourly wages in December were 4.6% higher than a year ago. The annual increase in November was initially reported as 5.1%, although that was revised down to 4.8%.
veryGood! (232)
Related
- Federal judge denies request to block measure revoking Arkansas casino license
- ¿Por qué permiten que las compañías petroleras de California, asolada por la sequía, usen agua dulce?
- Chimp Empire and the economics of chimpanzees
- Nueva página web muestra donde se propone contaminar en Houston
- Old Navy's Early Black Friday Deals Start at $1.97 -- Get Holiday-Ready Sweaters, Skirts, Puffers & More
- Toxic Releases From Industrial Facilities Compound Maryland’s Water Woes, a New Report Found
- Heather Rae El Moussa Shares Her Breastfeeding Tip for Son Tristan on Commercial Flight
- Apple moves into virtual reality with a headset that will cost you more than $3,000
- Judith Jamison, acclaimed Alvin Ailey American dancer and director, dead at 81
- A Complete Timeline of Kim Zolciak and Kroy Biermann's Messy Split and Surprising Reconciliation
Ranking
- Darren Criss on why playing a robot in 'Maybe Happy Ending' makes him want to cry
- Heather Rae El Moussa Shares Her Breastfeeding Tip for Son Tristan on Commercial Flight
- Texas Study Finds ‘Massive Amount’ of Toxic Wastewater With Few Options for Reuse
- Mega Millions jackpot grows to $820 million. See winning numbers for July 21.
- LSU leads college football Week 11 Misery Index after College Football Playoff hopes go bust
- Puerto Rico Is Struggling to Meet Its Clean Energy Goals, Despite Biden’s Support
- Inside Clean Energy: The Idea of Energy Efficiency Needs to Be Reinvented
- Study Finds that Mississippi River Basin Could be in an ‘Extreme Heat Belt’ in 30 Years
Recommendation
-
Roster limits in college small sports put athletes on chopping block while coaches look for answers
-
Inside Clean Energy: Here’s a Cool New EV, but You Can’t Have It
-
CBO says debt ceiling deal would cut deficits by $1.5 trillion over the next decade
-
This airline is weighing passengers before they board international flights
-
Megan Fox and Machine Gun Kelly are expecting their first child together
-
Inside Clean Energy: US Battery Storage Soared in 2021, Including These Three Monster Projects
-
Experts issue a dire warning about AI and encourage limits be imposed
-
Our first podcast episode made by AI