Job growth slowed in recent months, but the overall labor market remains tight. In December, total nonfarm payroll employment increased by 223,000, and the unemployment rate ticked down to 3.5%, back to its lowest point before the pandemic. However, in a positive sign for inflation, wage growth slowed to a 4.6% year-over-year gain, the slowest pace since August 2021.
Construction industry employment (both residential and non-residential) totaled 7.8 million and exceeds its February 2020 level. Residential construction gained 9,500 jobs, while non-residential construction employment gained 17,900 jobs in December. Residential construction employment exceeds its level in February 2020, while 89% of non-residential construction jobs lost in March and April 2020 have now been recovered.
Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, edged up 0.1 percentage point to 62.3% in December, reflecting the increase in the number of persons in the labor force (+439,000) and the decrease in the number of persons not in the labor force (-303,000). Moreover, the labor force participation rate for people who aged between 25 and 54 ticked up to 82.4%, after three months of decreases. Both of these two rates are still below their pre-pandemic levels at the beginning of 2020 and are not fully recovered from the COVID-19 pandemic.
For industry sectors, leisure and hospitality (+67,000), health care (+55,000), and construction (+28,000) had notable job gains in December, while employment in retail trade (+9,000), manufacturing (+8,000), transportation and warehousing (+5,000) and government (+3,000) changed little.
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