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Jan. 5 (UPI) -- U.S. payroll growth for December vastly outpaced expectations, according to a report by the Bureau of Labor Statistics on Friday. The monthly employment situation summary showed the U.S economy added 216,000 non-farm payroll jobs in the month.
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Job gains trended up in government, health care, social assistance and construction as transportation and warehousing lost jobs in December.
Government employment was up by 52,000, most of those local government. During 2023 government added an average of 56,000 jobs a month compared with an average monthly gain of 23,000 in 2022.
Health care added 38,000 jobs in December. Construction added 17,000 new jobs.
The total job growth was well above Dow Jones estimates which forecast 170,000 jobs as economists were expecting a slower hiring rate and markets were looking for the right balance between jobs creation and inflation control.
Dow futures dropped immediately following the news while Treasury yields spiked upward.
Unemployment stayed at 3.7% with the number of unemployed people "essentially unchanged" at 6.3 million, Friday's report said.
"These measures are higher than a year earlier, when the jobless rate was 3.5% and the number of unemployed persons was 5.7 million," BLS said.
Average hourly earnings rose 0.4% to $34.27, according to Friday's BLS report.
During 2023 the U.S. economy was robust with strong jobs creation, unemployment below 4%, a strong stock market and wage growth that kept workers ahead of inflation as more workers entered the job market.
"In many ways, the labor market is at its best place it has been not only since [before the COVID-19 pandemic], but by some measures in decades," KPMG Chief Economist Diane Swonk told The Washington Post.
As the Federal Reserve did a balancing act trying to tamp down inflation without tipping the economy into recession with several consecutive interest rate hikes, markets are looking to thread the needle heading into a new year with a just-right blend of numbers that keeps the economy humming and recession at bay.
In November the Fed decided to leave interest rates unchanged after 11 consecutive interest rate hikes.
On Thursday the private company ADP reported 164,000 private sector jobs were created in December, mostly service jobs.
Wednesday Bureau of Labor Statistics data found that job openings across the United States dropped by 62,000 to 8.8 million, close to Dow Jones estimates.
November's BLS report showed 199,000 jobs created while unemployment dropped to 3.7%. That was higher than Dow Jones estimates of 190,000.
