“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size. Business segments that hired aggressively in the first half of 2022 have slowed hiring and, in some cases, cut jobs in the last month of the year.”
Nela Richardson Chief Economist, ADP
The December jobs number beat economists’ estimates – barely. Conventional wisdom has it that the Fed will keep hiking interest rates based on the top line number. I am not so sure and the market’s rallied on this report. There are a few reasons for this line of thought:
· While the top line number exceeded expectations, jobs gains where adjust down the last two months.
· Wage gains slowed last month
· Temporary help was down for the third month in a row
Additionally, I expect inflation to continue to slow when the CPI number is released Thursday.
Analysis of the December Employment Report
· Temp Help down for the third month in a row. This is almost always a leading indicator of a slowing job market
· Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000.
· Wage growth was below expectations, with average hourly earnings up 4.6% from a year ago, below the 5% estimate.
· The consumer price index rose just 0.1% in November, and increased 7.1% from a year ago, compared with respective estimates of 0.3% and 7.3%.
· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons is down to 6.5%.
· Prime age labor force participation rate (ages 25-54) stayed steady at 82.4%. It is still off by .7% from February 2020, the last month before the pandemic started.
· The overall labor force participation remained was up .1% 10 62.3%. This number is disappointing as it still sits 1% below the level of February 2020.
· In December, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents, or 0.3 percent, to $32.82. Over the past 12 months, average hourly earnings have increased by 4.6 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents, or 0.2 percent, to $28.07.
· The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.3 hours in December. In manufacturing, the average workweek for all employees was little changed at 40.1 hours, and overtime declined by 0.2 hour to 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.8 hours.
· APD is reported that 235,000 jobs were added in last month. Job resurgence was seen in the last two months of 2022 led by consumer-facing service industries. Hiring was strong across small and medium establishments while large establishments saw a drop in employment of 151,000 jobs.
Source: ADP, BLS, CNBC, Fox News
JOB OPENINGS AND LABOR TURNOVER – NOVEMBER 2022
The number of job openings was little changed at 10.5 million on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.1 million and 5.9 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.4 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.
Job Openings
On the last business day of November, the number of job openings changed little at 10.5 million. The rate was unchanged at 6.4 percent but was 0.9 percentage points lower than its peak in March 2022. In November, job openings increased in professional and business services (+212,000) and in nondurable goods manufacturing (+39,000). The number of job openings decreased in finance and insurance (-75,000) and in federal government (-44,000).
Hires
In November, the number and rate of hires changed little at 6.1 million and 3.9 percent, respectively. Hires increased in health care and social assistance (+74,000).
Separations
Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.
In November, the number of total separations changed little at 5.9 million, and the rate held at 3.8 percent. The number of total separations increased in health care and social assistance (+99,000) and in transportation, warehousing, and utilities (+76,000).
In November, the number and rate of quits were little changed at 4.2 million and 2.7 percent, respectively. Quits increased in health care and social assistance (+82,000); transportation, warehousing, and utilities (+73,000); and information (+19,000).
In November, the number of layoffs and discharges changed little at 1.4 million, and the rate remained at 0.9 percent. Layoffs and discharges increased in finance and insurance (+19,000). The number of other separations increased in November to 347,000 (+83,000). Other separations increased in professional and business services (+49,000).
Establishment Size Class
In November, the total separations rate increased in establishments with 50 to 249 employees. The quits rate increased in establishments with 1 to 9 employees. For a more in-depth description of the JOLTS establishment size class estimates, please visit www.bls.gov/jlt/sizeclassmethodology.htm.
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The Job Openings and Labor Turnover Survey estimates for December 2022 are scheduled to be released on Wednesday, February 1, 2023, at 10:00 a.m. (ET).
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