The pace of job creation picked up as 2023 came to an end. Here are the five things we learned from U.S. economic data released during the week ending January 5.
Payrolls swelled again in December. Nonfarm payrolls increased by a seasonally adjusted 216,000, up from October’s and November’s gains of 105,000 and 173,000, respectively. The Bureau of Labor Statistics estimates payrolls expanded by 2.697 million in 2023, down from 2022’s 4.793 million gain. Private sector payrolls grew by 164,000 in December, including 142,000 in the service sector. The most significant gains were in health care/social assistance (+58,900), government (+52,000), and leisure/hospitality (+40,000). Average weekly earnings of $1,175.46 were up 3.8 percent from a year earlier. Based on a separate household survey, the unemployment rate held steady at a very low 3.7 percent.
Job openings declined slightly in November. Employers had 8.790 million (seasonally adjusted) open positions at the end of the month, down 62,000 from October and 18.2 percent from a year earlier. The Bureau of Labor Statistics report finds the private sector had 7.817 million unfilled jobs, with more than a million open jobs in professional/business services, health care/social assistance, and leisure/hospitality. Establishments hired 5.465 million workers, down 363,000 from October and 12.6 percent from a year earlier. The private sector was responsible for 5.096 million of the hires. 5.340 million people left their jobs in November, down 292,000 from the previous month and 10.2 percent from November 2022. 3.471 million workers quit their jobs (down 157,000 from October and 16.3 percent from a year earlier), while slowed by 116,000 to 1.527 million (+2.8 percent versus November 2022).
Factory orders grew in November. The Census Bureau reports that new orders for manufactured goods jumped 2.6 percent to a seasonally adjusted $592.9 billion. Orders of the first 11 months of 2023—$6.408 trillion—were 0.7 percent above the comparable 2022 months. Durable goods orders jumped 5.4 percent in November, while nondurable orders held steady for the month. Civilian nonaircraft capital goods orders gained 0.8 percent. Shipments rose 0.5 percent to $580.7 billion. Shipments over the first 11 months of 2023, totaling $6.329 trillion, were up 0.2 percent over the comparable 2022 months. Unfilled orders increased 1.3 percent to $1.375 trillion and inventories grew 0.1 percent to $857.1 billion.
Purchasing managers say manufacturing contracted in December… The Institute for Supply Management’s Manufacturing PMI improved by 7/10ths of a point to 47.4. The Manufacturing PMI has remained below 50.0—the threshold between an expanding and shrinking manufacturing sector—for 14 consecutive months. Falling were measures for new orders and inventories, while those for production and employment grew. Only one of 18 tracked manufacturing industries—primary metals—expanded in December. The press release notes that 84 percent of the manufacturing Gross Domestic Product (GDP) contracted during the month.
…but they also said the service sector expanded (but at a slower rate). The ISM’s Services PMI declined by 2.1 points to 50.6. Even with the drop, the Services PMI has been above 50.0 in 42 of the past 43 months. The business activity/production measure improved in December, but those for new orders, employment, and inventories fell. Nine of 18 tracked service sector industries reported growth, led by agriculture, accommodation/food services, and health care/social assistance. The press release noted survey respondents’ “concerns related to economic uncertainty, geopolitical events and labor constraints.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending December 30, 2023, First-Time Claims, seasonally adjusted): 202,000, -18,000 vs. the previous week, -4,000 vs. the same week a year earlier). 4-week moving average: 207,750 (-0.7% vs. the same week a year earlier).
- Construction Spending (November 2023, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.050 trillion (+0.4% vs. October 2023; +11.3% vs. November 2022).
- Vehicle Sales (December 2023, Automobiles and Light Trucks, seasonally adjusted): 15.829 million (+3.2% vs. November 2023; +16.8% vs. December 2022).
- FOMC Minutes
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What We Learned About the U.S. Economy Last Week 