WASHINGTON, D.C. — Total nonfarm employment in the United States increased by 216,000 jobs in December 2023, according to the U.S. Bureau of Labor Statistics (BLS). This jump significantly exceeds the one predicted by Dow Jones economists, who expected an increase of 170,000, according to CNBC. This number falls slightly below the 2023 monthly average increase of 225,000, and the unemployment rate remained unchanged at 3.7 percent.
Government employment comprised a significant portion of the total, with 52,000 positions added. Growth occurred primarily at a local level as municipal governments added 37,000 jobs, whereas the federal government added 7,000. The BLS calculates the monthly average for government employment growth in 2023 was 56,000 jobs, which is more than double the average of 23,000 in 2022.
Ryan Severino, managing director, chief economist and head of U.S. research at BentallGreenOak (BGO), says that government entities were challenged in 2022 because workers had the upper hand in the labor market as the private sector was actively hiring across various categories, which led to more mobility for employees. He says the government sector experienced a market correction of sorts in 2023.
“People aren’t leaving jobs as quickly as they once were, and the slowdown in private hiring makes government employment relatively more attractive,” says Severino, who adds that some government entities have become more receptive to hybrid and remote work schedules.
Severino says that the public sector also has had plenty of capital to deploy on staffing recently.
“The strong economy has generated ample tax revenues,” says Severino. “[And] positions approved in the past take time to fill, which is still happening.”
Other sectors that experienced notable increases in December include those of healthcare, social assistance and construction, which added 38,000, 21,000 and 17,000 jobs, respectively.
Transportation and warehousing, on the other hand, declined by 23,000 in December. Other industries, including leisure and hospitality, retail and professional and business services, saw little change.
Mike Fratantoni, senior vice president and chief economist of the Mortgage Bankers Association (MBA), says that the report showed that the economy “remained relatively strong” in December but also says the findings were a mixed bag as the employment growth was concentrated in a few sectors.
“This report shows a job market little changed from November,” says Fratantoni. “We expect that the economy will slow down in 2024, and this will likely lead to increases in the unemployment rate.”
The BLS revised October and November’s payroll numbers down by a total 71,000, putting the months’ numbers at 105,000 and 173,000, respectively.