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In 2023, market growth continued – December marked the 36th consecutive month of job creation – but slowed. There were 2.7 million jobs added in 2023 vs. 4.8 million in 2022. The U.S. labor market ended the year strong, with 216,000 jobs added in December, far above the Dow Jones estimate of 170,000. Average hourly earnings rose 4.1% from 2022, higher than the 3.9% forecast. As we head into 2024, the market continues to look strong. Job openings still significantly outnumber the amount of people looking for a job.

The Numbers*:

The U.S. economy added 216,000 jobs and payroll employment rose by 2.7M in 2023, a monthly average gain of 225,000. Though lower than the 2022 monthly average of +399,000, it was a year of strong job market gains and stabilization.

The unemployment rate held steady at 3.7% (6.3M). Unemployment among the major work groups also held steady.

The labor force participation rate decreased by 0.3 to 62.5% in December. The drop of nearly 700,000 people participating in the market was across most work groups. It eliminated more than half of the labor force participation gains from earlier in 2023.

• Average hourly earnings gained 0.4% again (+15 cents).
• In 2023, average hourly earnings increased by 4.1%.
• The number of job openings changed slightly to 8.8 million and the job openings rate was unchanged at 5.3%.
• The number of hires decreased to 5.5M (-363,000).
• Total separations decreased to 5.3M (-292,000).
• Within the separations, quits decreased to 3.5M (-157,000) and layoffs and discharges (1.5M) changed little.
• Average weekly hours worked was reduced by 0.1 hours and returned to 34.3 hours per week (private, non-farm payrolls.

The revisions for 2023 were that November job gains revised down from +199,000 to + 173,000. October gains were also revised down from +150,000 to +105,000. Even though combined revisions over 2023 erased 439,000 jobs, the market finished strong and resilient.

Industry Trends:

Interesting Facts:

The U.S. labor market ended the year strong, again outpacing forecasts. That strength, in part, buoyed consumer confidence and spending, led the Feds to pause interest rate hikes and helped avoid a recession in 2023.

In December, there was little change in the number of people employed part-time for economic reasons. Still that number increased by 333,000 over the year. These people would have preferred full-time work but have either been unable to find work or had their hours reduced.

While the jobs report has areas of strength and weakness, the market’s resilience supports consumer spending, which helped the U.S. avoid a recession in 2023. Continued growth looks likely for 2024.