January 7, 2023
The U.S. economy added +223,000 jobs in December, beating expectations of +200,000.
Over the past three months, the economy has added an average of +247,000 jobs per month.
For 2022 as a whole, the economy added +4.5 million jobs (an average of +375,000 per month), compared to +6.7 million jobs added in 2021 and a net -9.3 million jobs lost in 2020.
![](https://www.patrickchovanec.com/wp-content/uploads/2022/12/Screen-Shot-2022-12-13-at-3.23.21-PM.png)
The jobs number for October was revised down by -21,000 and November was revised downwards by +7,000, for a net revision of -28,000.
Leisure and hospitality added the most jobs (+67k), though employment in that sector remains -932,000 (-5.5%) below its pre-Covid level. Health care jobs rose by +55k, and construction added +28k. Manufacturing changed little (+8k), as gains in durable goods (+24K) were partially offset by losses in nondurable goods (-16k). Other sectors saw relatively little change.
The U.S. unemployment rate for December edged back down to 3.5%, from a revised 3.6% in November.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-07-at-9.41.38-PM.png)
The labor participation rate rose slightly to 62.3%, but remains noticeably below pre-Covid levels. The exit of so many people from the workforce has the effect of lowering the measured unemployment rate.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-07-at-9.43.24-PM.png)
Many of the people who dropped out the workforce during Covid were older. The employment-to-population ratio among prime working-age people has been steadily rising back to pre-Covid highs, at 80.1%.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-07-at-9.44.55-PM.png)
Average hourly wages rose by +0.3% m/m in December, up +4.6% from a year ago. However, with inflation running at +7.1% y/y (as of November), this represents a decline in average real wages.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-07-at-9.47.09-PM.png)
In 3Q2022 (the latest available calculation), real hourly wages were down -4.0% from a year before.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-13-at-12.14.16-PM.png)
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