In the midst of America’s economic turmoil last year, a very tight labor market marked a rare high point, with low unemployment, strong employment, and rapidly rising wages.
The government’s employment report for December, due for release on Friday, will indicate how good that year was. Wall Street, the Federal Reserve, and businesses across the country will be closely scrutinizing the numbers to see how hot the job market is — or whether it’s showing signs of slowing.
Here’s what they’ll look at.
How many jobs has the United States created?
Economists expect employers to add 200,000 jobs in December, according to a survey by FactSet. This may represent a decline from the strong pace of employment in the second half of the year, but it still points to much stronger job creation than is needed to keep up with population growth and unemployment from rising.
“The announced hiring freeze began in late fall, but most companies continued to honor signed offers,” Glassdoor chief economist Aaron Terrazas said in a blog post. Mail. “In combination with the acceleration of layoffs, the first signs of slow hiring are likely to be seen in the December jobs data.”
Does more jobs mean more people are working?
Economists will also look closely at the unemployment rate and other measures of worker health, including whether or not people say they are looking for work.
The Labor Department’s monthly employment report is compiled from two separate surveys — one of businesses and the other of households, the two of which have diverged in recent months. In particular, the unemployment rate is calculated from the household survey. The rate recently rose to 3.7%, but the household survey also showed that the number of Americans with jobs has fallen since early fall.
“There’s uncertainty about not only what’s going to happen, but what’s happened in the last year,” said Julia Pollack, chief economist at ZipRecruiter. “Currently, the survey of establishments indicates that the economy added 5 million jobs last year; the survey of households indicates that we added only half that number.”
What happens to temporary jobs?
Employment in temporary jobs is often seen as a leading indicator for the labor market as a whole. Fast-growing companies usually resort to contracting and hiring temporary workers first, before increasing their payroll—conversely, downsizing companies find it easier to cut back on outside help.
“Temp help employment has been down for three consecutive months, is it declining or growing?” Pollack said. Another indicator is the total hours worked, which gives a hint as to whether the overall labor intensity is growing or steady.
“Working hours went up in 2021 and since then they’ve been coming down,” she said. “They’re now where they were before the pandemic.” “This indicates that the labor market has returned to normal and demand is easing; if this is the case [drop] Continuing, that would be a sign of declining demand.”
What happened with the worker’s wages?
Wage growth unexpectedly rebounded in November — good news for workers hit by inflation, but bad news for the Federal Reserve, which has indicated it wants to see workers’ paychecks fall dramatically, because it thinks it will reduce inflation.
Economists will be watching the report closely to see if the November payroll jump was real and to try to guess which direction wages will take in the future.
“The cost of wages and benefits is one area where I expect to see some pressure going forward,” Gregory Daco, chief economist at EY-Parthenon, told CBS News. “That’s why we expect to see wages gradually decrease over the course of this year.”
What industries are growing and shrinking?
Technology and, to a lesser extent, the finance, warehousing, and transportation industries have been marked by heavy job cuts. Just this week, Amazon said it was cutting a rangeWhile And the video service Vimeo has moved to cut its workforce by a tenth of its workforce.
to me LayoffsLast year, 154,000 jobs were cut in the technology sector. But those figures have yet to appear in the government’s monthly reports, which show employment in the information industry continues to rise. A broader report on job turnover from the government also showed no significant increase in unemployment. This could mean that laid-off tech workers quickly find other jobs or that they leave the job market altogether.
Pollack noted that the three sectors in which layoffs rose — technology, finance and warehousing — are all areas that have seen increased growth during the pandemic due to unprecedented changes such as the boom in retail stock trading and the shift to online work and shopping.
“All of these conditions have now changed. We are seeing deflation, regression and cost cutting,” she said. It is worth watching, however [government] The data does not indicate a significant increase in layoffs.