Updated Jan 5, 2024 - Economy

U.S. economy adds 216,000 jobs in December, ending 2023 with a bang

Photo: Howard Schnapp/Newsday RM via Getty Images

The U.S. economy added 216,000 jobs last month while the unemployment rate held at 3.7%, the Labor Department said on Friday.

Why it matters: The final snapshot of the 2023 labor market shows hot hiring — the latest sign that the American job market continues to defy expectations of a slowdown.

  • The figure is well-above the roughly 170,000 jobs economists expected.

The big picture: The Federal Reserve has hinted it likely won't raise interest rates again with encouraging signs that inflation is easing and the labor market is cooling.

  • That concludes an aggressive rate hiking cycle that began in 2022 and lasted through much of last year.
Data: U.S. Department of Labor; Chart: Axios Visuals
Data: U.S. Department of Labor; Chart: Axios Visuals

For now, however, there is little evidence those rate hikes translated into pain for workers in 2022.

  • American consumers, however, remain dissatisfied with the economy — a problem that may continue to weigh on the Biden White House as the 2024 election heats up.

Details: Friday's jobs report shows the labor market stayed strong. Hiring increased in sectors including government, health care, and construction. Transportation and warehousing shed jobs.

  • Average hourly earnings, a measure of wages, rose by 0.4% last month. Compared to the prior year, average hourly earnings rose 4.1%.
  • The share of the population with in the labor force — that is, with a job or looking for one — was 62.5% in December, roughly 0.3 percentage point less than the prior month.
  • The Labor Department also said the economy added a combined 71,000 fewer jobs than initially estimated in October and November.

The bottom line: The hotter-than-expected jobs figures are one of several more key economic reports due before Federal Reserve officials meet at the end of the month.

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