Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Nonfarm Payrolls Increased 223,000 in December
Posted Under: CPI • Data Watch • Employment • Government • Inflation • Fed Reserve • Interest Rates • COVID-19
Supporting Image for Blog Post

 

Implications:  On the surface, the job market looks good.  But the details of today’s report warn of trouble ahead.  First the good news.  Nonfarm payrolls rose 223,000 in December, beating the consensus expected 203,000 and ending the year with a total gain of 4.5 million.  Meanwhile, civilian employment, an alternative (although more volatile) measure of jobs that includes small-business start-ups, rose 717,000 in December, ending the calendar year with a total gain of 3.2 million.  In addition, the labor force (workers and those looking for work) grew 439,000 in December, ending the year with a total gain of 2.6 million.  Put it all together and we finished the year with an unemployment rate at 3.5%, tying the low so far for the recovery from COVID.  But here’s why today’s report signals some trouble ahead.  Temporary help service jobs (temps) fell 35,000 in December, the fifth straight monthly decline, to a level below a year ago.  Consistent declines in temp jobs usually happen late in a business cycle.  And although jobs increased in December, the total number of hours worked did not.  Total hours ticked down 0.1% for the month, the second consecutive decline.  The loss of hours in December was the equivalent to losing about 125,000 jobs.  Another way of thinking about it is that many employers were still hiring, but workers didn’t have as much to do.  That’s not sustainable.  Some “bond market vigilantes” were happy that average hourly wages rose a moderate 0.3% in December, while the year ago comparison slowed to a gain of 4.6% (versus 5.6% back in March).  They think this means the Federal Reserve has less work to do.   But the “core” CPI (excluding food and energy) is likely up about 5.9% in the past year, which suggests the Fed will keep raising short-term rates in the months ahead.   The slowdown in wage growth also spells trouble for workers’ purchasing power.  Combining wages and hours worked, total private-sector wages are up 6.6% from a year ago, roughly the same as overall consumer prices…and that’s with 4.5 million more workers!  Bottom-line: beneath the good headlines, the job market is getting weaker, but the not weak enough to stop the Fed from raising rates further in the months ahead.

Click here for a PDF version

Posted on Friday, January 6, 2023 @ 12:01 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
The Trade Deficit in Goods and Services Came in at $61.5 Billion in November
The ISM Manufacturing Index Declined to 48.4 in December
The Housing Outlook for 2023
High Frequency Data Tracker 12/30/2022
High Frequency Data Tracker 12/23/2022
New Single-Family Home Sales Increased 5.8% in November
Personal Income Rose 0.4% in November
Greedy Innkeeper or Generous Capitalist?
Real GDP Growth in Q3 Was Revised Higher to a 3.2% Annual Rate
Is the BLS Cooking the Books?
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.