The U.S. job market continues to be tight, with an unemployment fee of simply 3.5%. Employers slowed their fee of hiring final month, which ought to ease the Federal Reserve’s fears of inflation.
SCOTT SIMON, HOST:
There have been some severe layoffs within the excessive tech trade recently – Amazon chopping 18,000 jobs. Salesforce is shedding greater than 7,000 folks. However the broader job market continues to be buzzing and the unemployment fee final month was simply 3.5%. That matches its lowest degree since 1969. NPR’s Scott Horsley joins us. Scott, thanks a lot for being with us.
SCOTT HORSLEY, BYLINE: Good morning, Scott.
SIMON: Employers have been including a whole lot of 1000’s of jobs month after month. What’s been happening?
HORSLEY: Yeah, December was one other strong month of job progress, with 223,000 jobs added final month. The tempo of hiring has slowed for the reason that starting of final yr, however there are nonetheless a lot of jobs obtainable. What’s additionally encouraging is that greater than 400,000 folks joined or rejoined the workforce final month. And economist Michael Pugliese of Wells Fargo says that is serving to to shut what had been an enormous hole between employers’ demand for staff and the variety of folks obtainable to fill these jobs.
MICHAEL PUGLIESE: It is only one report, proper? , you do not need to put an excessive amount of weight on a single studying, however it has the correct mix of substances for, you understand, proof that labor provide and demand are coming again into stability.
HORSLEY: And which will spell some reduction for the Federal Reserve, which has been fearful that an overheating job market may gasoline inflation. Yesterday’s report does not erase these considerations, however it does recommend issues are transferring in the fitting path.
SIMON: And Wall Road’s excited.
HORSLEY: Yeah. The Dow Jones Industrial Common soared 700 factors yesterday, or greater than 2%. The opposite main inventory indexes rose by the same quantity. Buyers are hoping that because the job market steadily cools, it’ll take some stress off inflation and permit the Fed to gradual and even cease elevating rates of interest. Common wages in December had been up 4.6% from a yr in the past, which continues to be most likely sooner than the Fed would love. Nevertheless it’s a smaller annual enhance than the month earlier than. We’re going to get some extra complete wage knowledge later this month. And that is simply earlier than the central financial institution is ready to make its subsequent choice on rates of interest.
SIMON: On the identical time, Scott, are there weak spots on this week’s report?
HORSLEY: You actually see a slowdown in manufacturing jobs. That is a sector that is notably delicate to rising rates of interest. Factories are nonetheless hiring, however not as quick as they’d been. In fact, you talked concerning the job cuts we have seen in excessive tech. One other factor to keep watch over is short-term assist companies. They lower 35,000 jobs final month. Temps are sometimes the primary folks employed when companies are rising and the primary to be let go when demand tapers off. Jim McCoy is senior vp at ManpowerGroup, an enormous temp assist firm.
JIM MCCOY: Usually, there’s been a slight softening in demand for short-term staff that is been taking place for the reason that summer season. Lately, hiring was a little bit bit down, notably in help of retail sector, which you’d usually see extra of a pickup of temp hiring across the holidays. That was down a little bit bit.
HORSLEY: On the identical time, McCoy says he is nonetheless seeing strong demand for temp staff in fields like well being care. And well being care additionally added lots of everlasting staff in December with 55,000 new jobs.
SIMON: Scott, what do you assume we will stay up for for the job market within the new yr?
HORSLEY: We’re most likely going to see slower job progress. Employers added 4 1/2 million jobs final yr, and we’re not prone to repeat that, particularly as a result of all the roles that had been misplaced within the early months of the pandemic have now been changed. Thus far, although, there was no signal of widespread job cuts, regardless of a few of these ominous headlines you talked about and considerations a couple of doable recession. It looks like after struggling for a lot of the final two years to search out sufficient staff, employers are going to be gradual handy out pink slips if they’ll keep away from it.
SIMON: NPR’s Scott Horsley, thanks a lot.
HORSLEY: You are welcome.
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