How did the nation end the year relative to jobs and unemployment, and what does it mean for businesses and the workforce moving forward?
It all depends on who you ask.
Some experts called the December jobs data “startlingly strong” and the U.S. economy “one of the strongest in decades” while others said underlying facts point to trouble ahead.
All told, the U.S. labor market added 216,000 jobs last month, well above the 170,000 economists projected. But the increase comes with a caveat – that the jobs numbers for the previous two months were revised downward by 71,000 so the actual jobs gain in December was smaller than expected. What’s more, the hot jobs were in government and health care while hiring in the private sector lagged behind, according to one economist.
The unemployment rate held steady at 3.7% and remained below 4% for the 23rd straight month. Meanwhile, the average hourly pay for American workers beat expectations by rising 4.1% year over year compared to forecasts of 3.9%.
Our take on the jobs report
From our perspective, the December numbers were good news for our clients and their employees. Our government, health care and education teams were especially busy recruiting for open positions, which parallels the hot jobs noted in the December report.
Some companies taking a wait-and-see approach to hiring; others are ‘labor hoarding’
While the jobs data were well-received by our clients, some are taking a wait-and-see approach to filling open positions in 2024 as they keep a close eye on the economy.
Conversely, other clients are labor hoarding (a practice in which companies keep more workers on the payroll than they actually need) to ensure they have quality talent in place.
A few wild cards
Our clients are watching what happens with interest rates and how planned reductions affect particular business sectors. Corporate America’s return to the office is also a topic of interest, particularly as it relates to its effect on the labor market.