American Job Market: The Gift That Keeps On Giving

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A month ago, I commented: “We’re at that point where we’ve just plain run out of superlatives to describe our job market. For the 23rd consecutive month, we have accomplishments to celebrate and milestones to admire.”

Make that 24.

And then I said: “The American job market has been through the roughest seas that any of us who are still in the market can remember: Covid, climate crisis, supply chain clogs, war in Ukraine, chip shortages, political turmoil (crazier than ever mid-term shenanigans), cryptocurrency upheavals, inflation, looming recession (although forcefully pushed back by the continuing good performance of the job market), stock market volatility, and so on.”

And if that weren’t enough, we can add the hype of the run-up to the selection of a new speaker of the House of Representatives, which played out in [Pick one: preposterous, ridiculous, ludicrous, silly] fashion in the wee hours this morning (January 6).

And our job market? Stronger than ever. As a friend of mine texted me when the BLS jobs report was released on Friday morning, “Under these circumstances? WOW!”

Wow, indeed.

Here’s what everyone is saying wow about, pretty much an encore performance.

Job creation

The economy added 223,000 jobs in December, historically high, but the lowest since December 2020. Setting aside, for a moment, the grotesque numbers of early and mid-2020 – 22 million jobs lost and then millions brought back, all within a few months – there were, in this century, stretches of 44, 23, and 61 months in which 233,000 jobs would have been the highest number.

The year finished out in even more spectacular fashion, with 4.503 million new jobs. What’s head-snapping about that is that, coming off 2021’s record-smashing 6.743 million, this past year took its place as #2 in history, not skipping beat. And in full perspective, the past two years saw 11.246 million jobs created, more in just two years than any four-year period with the exception of each of Bill Clinton’s two terms.

But there’s so much more to the job market. Such as…

Where were the jobs?

Everywhere, that’s where. Job gains were wide-spread across the board: 67K in leisure and hospitality, 55K in health care, 28K in construction, 20K in social assistance, 14K in other services, 9K in retail, 8K in manufacturing, 5K in transportation, 4K in mining, and 3K in government. Remaining sectors showed little change. In baseball terms, everyone in the lineup is hitting.

Money in the pocket

Average hourly earnings for all employees on private nonfarm payrolls rose 0.3 percent, to $32.82. Over the past 12 months, average hourly earnings have increased by 4.6 percent, and while that lags inflation, the good news is that inflation is coming down faster than predicted, and American workers are suffering far less than their counterparts in most of the developed economies.

Historic precedence

With 2022 complete (although the preliminary numbers are open to adjustment for two months, as per SOP), we’ve now experienced two consecutive years of more than 4.0 million new jobs. The last time we had two consecutive years of more than 4.0 million jobs created was 1977-78. In fact, that was the only time. And those combined totals were 8.223 million. What we’ve just seen blew past that by 37%. Hard to fathom.

Under the surface

Here’s some lesser-known data showing how solid our job market is. First, there are 10.458 million open jobs, a ratio of 1.8 open jobs to every one of the 5.772 million unemployed job seekers. While that’s down from its 11 million high, it’s still huge. That drop in open jobs means not only that those jobs are getting filled, but that employers are having to compete for qualified candidates to fill them. And that’s got a lot to do with the unemployment rate sinking historically low to 3.5% while wages and salaries continue to rise.

From my vantage point, this gift is not done giving.



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