Category: US

The December jobs report beat expectations once again, as key service sectors continued to show strong growth.

Health care and social services led the way with a gain of more than 74,000 jobs last month, the Bureau of Labor Statistics said in its report, released Friday. That was driven in large part by an increase of 30,000 payrolls in ambulatory health care.

Leisure and hospitality and construction followed, with gains of 67,000 and 28,000, respectively.

“Health care has recovered to its pre-pandemic levels, but nowhere near its pre-pandemic trend, and hospitality is still not back to its pre-pandemic levels,” said Julia Pollak, chief economist at ZipRecruiter. Pollak added that both sectors look poised for long-term growth due to changing consumer trends and an aging population.

Retail trade and the transportation and warehousing sector also posted slight gains after shedding jobs the previous two months.

The highlight of the report for investors was lower wage growth, which could be a sign that the Federal Reserve’s efforts to bring down inflation are working. The central bank is attempting to achieve a soft landing, in which wages and inflation cool without a major spike in unemployment, but has made clear that inflation is its top priority.

The moderating wage growth is also one of a few signs in the report that the labor market might be softening slightly ahead of what many economists expect could be an economic slowdown or contraction this year.

“This is a very fragmented labor market, even if it is solid in the overall gains, and we’re going to see that play out in 2023. Those interest-rate sensitive like manufacturing I think are at high risk. Leisure and hospitality has carried the weight, but that’s going to be dependent on a consumer who is still able to spend,” ADP chief economist Nela Richardson said Friday on “Squawk Box.“

The information sector shed 5,000 jobs, possibly reflecting layoffs at tech companies.

Professional and business services saw the largest decline of the above sectors, shedding 6,000 jobs. That was driven by even larger losses in the temporary help services category, which could be a precursor to layoffs elsewhere, said Pollak.

“This report has fantastic, very encouraging signals when it comes to showing what happened in the rearview mirror. But leading indicators are a bit more worrying,” Pollak said.

Atlanta Federal Reserve President Raphael Bostic said Friday that December’s jobs report, with its slowdown in wage increases and better-than-expected employment growth, doesn’t change his view on monetary policy.

The central bank official said he still sees interest rates rising, up past 5% for the Fed’s benchmark funds rate, where he sees it staying for a prolonged period.

“It doesn’t really change my outlook at all,” Bostic told CNBC’s Steve Liesman during a live interview at a conference in New Orleans. “I’ve been looking for the economy to continually slow from the strong position it was at in the summertime. This is just the next step in that.”

Nonfarm payrolls added 223,000 positions last month, and the unemployment rate fell to 3.5%, the Labor Department reported. That was slightly better than respective estimates for 200,000 and 3.7%.

Perhaps more importantly, average hourly earnings rose just 0.3% for the month and 4.6% from a year ago, both below expectations and an indicator that the inflation spiral gripping the economy for the past year and a half may be easing.

Still, Bostic said he expects another rate increase of either a quarter- or half-percentage point when the Fed releases its decision Feb. 1. The funds rate is currently targeted between 4.25% and 4.5%. Bostic is a nonvoting member this year of the rate-setting Federal Open Market Committee; he will vote again in 2024.

Open jobs still outnumber available workers by nearly 2 to 1, and wage growth is well above where it was before the Covid pandemic. Bostic added that he doesn’t think wages have been a key driver of the inflation that escalated in mid-2021 toward its highest level in more than 40 years.

“We’ve got to stay the course,” he said. “Inflation is too high. We need to reduce those imbalances so it moves more rapidly to our 2% [inflation] target.”

Fed officials at their December meeting expressed concern that the public might misinterpret the central bank’s move to a small rate hike — 0.5 percentage point from four straight 0.75 percentage point moves — as an easing in policy.

Bostic emphasized the Fed can’t “claim victory prematurely” and needs not only to keep pushing rates higher, but to keep them there.

“What I think is the important [point] is just to hold there and stay there and let that policy stance really grip the economy and just make sure that the momentum is fully arrested, so that we get to a place where demand and supply start to become more interbalanced and we start to see those pressures on inflation really start to to come down,” he said.

Bostic said he does not expect a recession to follow the Fed’s actions, and if there is one he sees it as “short and shallow.”

The U.S. unemployment rate declined overall in December, but rose for Black women and Hispanic men, according to the latest nonfarm payrolls report.

Black women saw unemployment increased to 5.5% last month, up 0.3 percentage points from 5.2% in November, data from the Labor Department showed Friday. Overall, Black employment held steady at 5.7%, while the unemployment rate for Black men actually declined to 5.1% from 5.4% last month.

Meanwhile, Latino men saw unemployment rise to 4% in December, an increase of 0.4 percentage points from 3.6% the prior month. The overall unemployment rate ticked up to 4.1% from 4.0%. Unemployment among Latino women also ticked up to 3.7% from 3.6%.

Those figures bucked the trend in the broader economy, which showed unemployment in the U.S. fall to 3.5% from 3.7%. It was 0.2 percentage points below consensus expectations from the Dow Jones.

“What we’ve really seen over the course of the last nearly three years since the pandemic hit, is that we’ve regained, in terms of aggregate numbers, all of the jobs lost,” said Michelle Holder, a distinguished senior fellow at Washington Center for Equitable Growth.

“But the sort of industrial mix has changed, and has kind of impacted what we’re seeing with regard to the distribution of joblessness, by gender, race and ethnicity. And it’s really disaffecting Black women and Latinx men,” Holder added.

A stronger-than-expected December jobs report continued to suggest a robust labor market, even as lighter-than-expected wage growth fanned some investor hopes that inflation may be coming down.

Nonfarm payrolls rose by 223,000 in December, more than the Dow Jones estimate of 200,000. Meanwhile, average hourly earnings rose 0.3% for the month and gained 4.6% from a year ago. These are compared to estimates of 0.4% and 5% increases.

“The labor market clearly remains strong,” said Elise Gould, a senior economist at the Economic Policy Institute. “We are now seeing that the household survey and the payroll survey are showing similar signs of strength, and wage growth is looks to be coming down.”

Still, parts of the economy where Black women are overrepresented showed little improvement, or failed to regain their levels from before the pandemic, according to Holder. Government employment was little changed, adding just 3,000 jobs in December. Notably, state government education employment dropped by 24,000 because of strikes from university employees, according to the Labor Department.

Both Black women and Latino men are well represented in the leisure and hospitality sector, according to Holder. The sector significantly added jobs in December, but remains below its pre-pandemic levels. Employment in the sector rose by 67,000 last month, but is still 932,000, or 5.5%, below what it was in February 2020.

“Those are two industries that have not recovered well during the pandemic,” Holder said. “This is what is constraining Black women’s ability to get back to the state that they were with regard to the American workforce before the pandemic.”

NFL safety Damar Hamlin’s breathing tube was removed and he FaceTimed into a meeting telling his teammates, “Love you boys,” as he continued his recovery after suffering a terrifying cardiac arrest during Monday night’s game against the Cincinnati Bengals, according to the Buffalo Bills.

The team tweeted Friday about Hamlin’s medical progress.

“Per the physicians at UCMC, Damar’s breathing tube was removed overnight. He continues to progress remarkably in his recovery. His neurologic function remains intact and he has been able to talk to his family and care team,” one tweet read.

Another statement from the team mentioned his interaction with his teammates.

“Damar Hamlin FaceTimed into our team meeting today to talk to players and coaches. What he said to the team: ‘Love you boys.'” The Bills’ tweet was punctuated by a heart emoji.

Hamlin’s collapse, watched by millions, occurred just after he tackled a Bengals receiver. It appeared that the receiver’s shoulder struck Hamlin in the chest.

It remains unclear what exactly caused Hamlin’s cardiac arrest. One possibility is a phenomenon called “commotio cordis.”

“Commotio cordis is an incredibly rare event,” Dr. William Knight, professor in the Department of Emergency Medicine at the University of Cincinnati College of Medicine, said Thursday. “It’s a diagnosis of exclusion,” meaning other conditions have to be ruled out before it can be determined definitively.

“It is on the list of considerations,” said Knight, who is part of a group of physicians treating Hamlin.

Normally, the heart pumps oxygen-rich blood throughout the body about every second. There is a rhythm to the process, keeping the blood flowing at a healthy pace. Every time the heart beats, there is a tiny moment — less than a fifth of a second — that makes it vulnerable to the force of a projectile that can lead to a chaotic and potentially deadly heart rhythm.

It is in this exact moment, experts say, that a blow to the chest in the exact right place can launch an otherwise healthy person into cardiac arrest. The heart’s electrical system malfunctions, and the heartbeat rhythm goes haywire.

It is too early, Hamlin’s doctors say, to determine whether he might return to professional football. There is a concern that Hamlin may have inhaled fluid or blood, potentially causing problems with lung function.

Upon regaining consciousness, Hamlin, 24, asked: “Did we win?,” his doctors said Thursday.

“The answer is yes,” Dr. Timothy Pritts, division chief of general surgery at the University of Cincinnati Medical Center, told Hamlin. “You won the game of life.”

The NFL announced late Thursday the game that was postponed following Hamlin’s collapse on the field will not be made up.

The league acknowledged that canceling the game “creates potential competitive inequities in certain playoff scenarios” and said NFL clubs will consider a resolution at a special league meeting Friday.

Part of that resolution could involve the Jan. 29 AFC Championship Game being played at a neutral site.

NFL Commissioner Roger Goodell said in Thursday’s statement that it has been “a very difficult week” and that the league is focused on Hamlin’s recovery.

— Erika Edwards, David K. Li and Phil Helsel contributed.