Wage growth slowed in December but was still better than expected, a sign. That the labor market remains strong even as. The Federal Reserve tries to slow economic growth.
Nonfarm payrolls rose 223,000 in the month. Above the Dow Jones estimate of 200,000. While the unemployment rate fell to 3.5%, 0.2 percentage points lower than expected. Job growth marked a small decline from a gain of 256,000 in November. Which was revised down to 7,000 from the initial estimate.
Wage growth was lower than expected. A sign that inflationary pressures may be weakening. Average hourly earnings rose 0.3% in the month and 4.6% from a year ago. Corresponding estimates were for growth of 0.4% and 5%.
By sector, leisure and hospitality led the addition of 67,000 jobs. Followed by healthcare (55,000), construction (28,000) and social help (20,000).
Stock market futures rose after the release as investors looked for signs . That the job market is cooling and inflation is easing.
The relative strength in job growth comes despite. The Fed’s repeated efforts to slow the economy, particularly the labor market. The central bank has raised. Its benchmark interest rate seven times in 2022 for a total of 4.25 percentage points. With more hikes likely on the way.
The Fed is seeking to bridge a gap between demand and supply.
As of November, there were about 1.7 job openings for every available worker. An imbalance that has persisted despite the Fed’s rate hike. Strong demand has pushed wages higher. Although they have not kept pace with inflation.
The unemployment rate fell as. The labor force participation rate rose to 62.3%, still a full percentage point below. Where it was in February 2020, a month before the Covid-19 pandemic hit.
A broader measure of unemployment. That takes into account discouraged workers and. Those holding part-time jobs for economic reasons also declined. Falling to 6.5%, its lowest reading in the 1994 data set. The headline unemployment rate is tied for the lowest since 1969.