This morning the Bureau of Labor Statistics released the first Monthly Employment Situation of 2023. The labor market ended 2022 with an unexpected addition of 260,000 jobs in December. Today it reported that last month there were 517,000 added jobs and that unemployment held steady at the 50-year low of 3.4%. Economists projected a considerable drop in added jobs, but the labor market is showing unprecedented strength amid recession fears.
The ADP Employment Report, released this past Wednesday, reported that private payrolls increased by 106,000 in January. Chief Economist at ADP, Nela Richardson said, “In January, we saw the impact of weather-related disruptions on employment during our reference week. Hiring was stronger during other weeks of the month…” While California dealt with record floods in December, the Central and Northeast United States suffered record-breaking blizzard conditions. Weather, especially extreme conditions, directly affects growth of the economy and the ability for workers to get to and from work. Utility outages are also likely to affect the population of employees working from home.
According to the Job Openings and Labor Turnover Summary released Wednesday, the number of job openings increased from 10.5 million in November to 11 million in December, but the rate of hires remained steady at 4%. The largest increase in job openings occurred in accommodation and food services, which added 409,000 openings and retail trade, which added 134,000 openings. The persistent imbalance of worker supply and labor demand continues to be a key indicator for the Federal Reserve in its efforts to reduce inflation.
Hikes in interest rates by the Fed have precipitated a slight ease in the rate of inflation, but the issue remains on the forefront of American’s minds. The Consumer Confidence Index, a key economic indicator, decreased from 109.0 in December to 107.1 in January. Similarly, the Expectations Index fell from 83.4 to 77.8 in January. The fall to well below 80 indicates that a recession is likely to hit within the next year.
Job gains were widespread in January. Leisure and hospitality led job with 128,000 added jobs in January, with food services and drinking places increasing by 99,000 jobs, and accommodation added 15,000. Employment in professional and business services increased by 82,000 jobs, and government employment gained 74,000 jobs. Health care added 58,000 jobs, retail trade added 30,000 jobs, and construction added 25,000. The average hourly earnings for nonfarm payrolls increased by 10 cents.
Sean Macari is the Chief Executive Officer and owner of Valiant Search, an executive search firm headquartered in Albany, New York that recruits and places attorneys and legal support for law firms and legal departments. He can be reached at (518) 732-7848 or email@example.com. For more information on Valiant Search, please visit www.valiantsearch.com.