Kiplinger’s Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or to subscribe for the latest trends and forecasts from our highly experienced Kiplinger Letter team.
Jobs gains were strong in December, with a 256,000 increase, surprising analysts who had expected a moderating trend. Hiring jumped in the retail sector, reversing job losses in November, as stores waited longer than usual to add staff for the Christmas rush. The health care sector continued its hiring spree, adding 46,100 workers, and state and local governments continued to play catchup after the pandemic by adding 27,000 workers. Social assistance agencies added 23,400 jobs. Durable goods manufacturers lost 16,000, mostly in automotive and semiconductors.
The strength in the labor market pushed the unemployment rate back down to 4.1%, from 4.2% previously. The number of people working part-time because of slack business conditions saw a big drop in December, hitting the lowest level in six months.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Growth in average hourly earnings dipped slightly, from 4.0% to 3.9% over the previous 12 months for all workers, and from 3.9% to 3.8% for production workers. Progress on reducing wage growth had stalled in the second half of last year, but could be resuming now. The Federal Reserve would like to see annual wage gains come down to 3% or 3.5%, given that stronger wage growth could make it harder to bring overall inflation down to the Fed’s goal of 2%. The Fed would also like to see monthly job gains drop below 200,000, which would suggest that the labor market will not overheat again.
A return to more typical levels of hiring in the labor market is likely, with future monthly job gains likely to be in the 150,000 range. Recent job market strength has been far above that of labor force growth. Eventually, state and local government agencies will fill the vacancies they experienced during the pandemic. Also, the goods-producing sector is still showing weakness. There were job losses in nondurable manufacturing, and in e-commerce delivery and warehousing. Temp jobs may continue their downtrend of more than two years. These jobs are often in the manufacturing sector and tend to be cut first when demand for manufactured goods softens.
Related Content
-
RFK Jr. Confused Medicare and Medicaid: Here's the DifferenceThe HHS Secretary nominee confused Medicare and Medicaid programs, though he would be responsible for them. We break down the difference.
-
UPS Stock Plunges as Amazon Plans 50% Volume CutUPS stock is lower after announcing that Amazon, its largest customer, will slash its volume by more than 50% by late 2026. Here's what you need to know.
-
Post-Disaster Financial Planning: How to Protect Your AssetsA financial adviser who knows all about surviving natural disasters recommends ways to mitigate long-term damage to your financial health after a disaster.
-
After the Fed Meeting, Seven High-Yield Savings Accounts Worth Your WhileThe Fed didn't cut interest rates during their meeting this week. These high-yield savings accounts offer attractive rates to beat continuing inflation.
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Is 2025 the Year Workers Will Return to the Office?Managers want to cut back on remote work, but many employees value flexibility.
-
Why I'm Not Chasing Airline Status This YearUnited Premier status is harder to gain in 2025, and as a non-business traveler, I'm giving up hope.
-
Listed: Live Your Snowbird Life Year-Round in These Three HomesSee fabulous real estate listings of homes in snowbird destinations Savannah, San Diego and South Padre Island, as part of Kiplinger's new "Listed" series.
-
How Much Fun Is Too Much Fun When You're in the Office?Having a work-should-be-fun atmosphere sounds great — until someone gets hit in the head by a basketball. What should companies consider about workplace safety?
-
On Medicare and Need Telehealth? You Have Three More Months to Use These ServicesAll Medicare patients still have access to telehealth services until March 31. Starting April 1, you must be located in a rural area for most telehealth services
