U.S. economy added 223,000 jobs in December

• The rise in nonfarm payrolls for the month was 223,000, exceeding estimate of 200,000.
• The wage growth was lower than anticipated.
• The Fed’s main goal is to close the gap between supply and demand.

However, the increase in employment was slightly less than the 256,000 increase in November, which was revised downward by 7,000 from the preliminary estimate.
Although payroll growth slowed in December, it was still more than anticipated, showing that the labour market is still robust despite efforts by the Federal Reserve to curb economic growth.

The rise in nonfarm payrolls for the month was 223,000, exceeding the Dow Jones estimate of 200,000, while the unemployment rate decreased to 3.5%, 0.2 percentage points below expectations. The increase in employment was somewhat lower than the 256,000 increase in November, which was reduced down 7,000 from the preliminary estimate.

The wage growth was lower than anticipated, suggesting that inflation pressures may be easing. The average hourly wage climbed by 4.6% from a year ago and by 0.3% for the month. Estimates for the growth were 0.4% and 5%, respectively.
Sector-wise, health care came in second with 55,000 new employment, followed by construction (28,000), leisure and hospitality (67,000), and social assistance (18,000). (20,000).

Following the report, stock market futures increased as investors searched for indications that the labour market was cooling and bringing inflation down as well.

The Fed’s main goal is to close the gap between supply and demand. In spite of the Fed’s rate hikes, there were approximately 1.7 job opportunities for every worker who was available as of November. Even while earnings have generally not kept up with inflation, the great demand has driven up their prices.

The increase in the labour force participation rate to 62.3%, which is still a full percentage point below where it was in February 2020, the month before to the Covid-19 outbreak, coincided with the decline in the unemployment rate.

In a data set dating back to 1994, a more comprehensive measure of unemployment that accounts for discouraged workers and those who hold part-time jobs for financial reasons also decreased, falling to 6.5%, its lowest-ever level.

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