Ball State Economist: December Jobs Report Shows Volatile Labor Markets

MUNCIE, IND. — The December jobs report “again disappointed,” says Dr. Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Muncie. The U.S. Bureau of Labor Statistics reported non-farm payroll employment grew by 199,000 in December, but Hicks says the consensus estimate by economists was 447,000 new jobs. The December report followed on the heels of somewhat tepid job growth figures in November as well.

Average hourly earnings were up 4.7 percent from December 2020, according to the Bureau of Labor Statistics. According to Hicks, wages accelerated in December 2021 growing at an annualized 7.3 percent, suggesting continued strong demand for workers. But labor markets continue to be volatile with significant turnover.

“This job report signals higher wage costs that are not matched by large employment gains,” says Hicks. “This complicates discussion about raising interest rates to reduce inflationary risks.”

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