Posted on January 12, 2023.

Total nonfarm payroll employment increased by 223,000 in December, and the unemployment rate edged down to 3.5 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance.

This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. 

| Revision of Seasonally Adjusted Household Survey Data |

Seasonally adjusted household survey data have been revised using updated seasonal adjustment factors, a procedure done at the end of each calendar year. Seasonally adjusted estimates back to January 2018 were subject to revision. The unemployment rates for January 2022 through November 2022 (as originally published and as revised) appear in table A at the end of this news release, along with additional information about the revisions.

Household Survey Data

The unemployment rate edged down to 3.5 percent in December and has remained in a narrow range of 3.5 percent to 3.7 percent since March. The number of unemployed persons edged down to 5.7 million in December.

Among the major worker groups, the unemployment rate for Whites fell to 3.0 percent in December. The jobless rates for adult men (3.1 percent), adult women (3.2 percent), teenagers (10.4 percent), Blacks (5.7 percent), Asians (2.4 percent), and Hispanics (4.1 percent) showed little or no change over the month. 

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 146,000 to 1.1 million in December. This measure is down from 2.0 million a year earlier. The long-term unemployed accounted for 18.5 percent of all unemployed persons.

The employment-population ratio increased by 0.2 percentage point over the month to 60.1 percent. The labor force participation rate was little changed at 62.3 percent. Both measures have shown little net change since early 2022. These measures are each 1.0 percentage point below their values in February 2020, prior to the coronavirus (COVID-19) pandemic. 

The number of persons employed part time for economic reasons, at 3.9 million, changed little in December. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. 

The number of persons not in the labor force who currently want a job fell by 352,000 to 5.2 million in December and is little different from its February 2020 level of 5.1 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 

Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force declined by 231,000 to 1.3 million in December. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 410,000 in December, essentially unchanged from the previous month. 

Establishment Survey Data

Total nonfarm payroll employment increased by 223,000 in December. Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance. Payroll employment rose by 4.5 million in 2022 (an average monthly gain of 375,000), less than the increase of 6.7 million in 2021 (an average monthly gain of 562,000).

In December, employment in leisure and hospitality rose by 67,000. Employment continued to trend up in food services and drinking places (+26,000); amusements, gambling, and recreation (+25,000); and accommodation (+10,000). Leisure and hospitality added an average of 79,000 jobs per month in 2022, substantially less than the average gain of 196,000 jobs per month in 2021. Employment in the industry remains below its pre-pandemic February 2020 level by 932,000, or 5.5 percent.

Health care employment increased by 55,000 in December, with gains in ambulatory health care services (+30,000), hospitals (+16,000), and nursing and residential care facilities (+9,000). Job growth in health care averaged 49,000 per month in 2022, considerably above the 2021 average monthly gain of 9,000.

Employment in construction increased by 28,000 in December, as specialty trade contractors added 17,000 jobs. Construction employment increased by an average of 19,000 per month in 2022, little different than the average of 16,000 per month in 2021.

Social assistance added 20,000 jobs in December. Employment in individual and family services continued to trend up over the month (+10,000). Job growth in social assistance averaged 17,000 per month in 2022, compared with the 2021 average of 13,000 per month.

Employment in the other services industry continued to trend up in December (+14,000). Monthly job growth in other services averaged 14,000 in 2022, lower than the average of 24,000 per month in 2021. Employment in other services is below its February 2020 level by 174,000, or 2.9 percent. 

In December, mining employment increased by 4,000, reflecting job growth in support activities for mining (+5,000). Since a recent low in February 2021, mining employment has grown by 104,000.

Employment in retail trade changed little in December (+9,000). Job growth in retail trade averaged 16,000 per month in 2022, less than half the average growth of 35,000 per month in 2021.

Over the month, employment in manufacturing changed little (+8,000), as job gains in durable goods (+24,000) were partially offset by losses in nondurable goods (-16,000). In 2022, manufacturing added an average of 32,000 jobs per month, little different than the average of 30,000 jobs per month in 2021.

In December, employment in transportation and warehousing changed little (+5,000). Air transportation (+3,000) added jobs over the month, while employment continued to trend down in couriers and messengers (-4,000) and in warehousing and storage (-3,000). In 2022, average job growth in transportation and warehousing (+17,000) was about half the average job growth in 2021 (+36,000).

In December, government employment was essentially unchanged (+3,000). Employment in state government education declined by 24,000, reflecting strike activity among university employees.

Employment in professional and business services remained little changed in December (-6,000). Employment in temporary help services declined by 35,000 over the month and has fallen by 111,000 since July. Job growth in professional and business services averaged 50,000 per month in 2022, roughly half of the average of 94,000 per month in 2021.

Over the month, employment showed little change in other major industries, including wholesale trade, information, and financial activities.

In December, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents, or 0.3 percent, to $32.82. Over the past 12 months, average hourly earnings have increased by 4.6 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents, or 0.2 percent, to $28.07. 

The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.3 hours in December. In manufacturing, the average workweek for all employees was little changed at 40.1 hours, and overtime declined by 0.2 hour to 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.8 hours. 

The change in total nonfarm payroll employment for October was revised down by 21,000, from +284,000 to +263,000, and the change for November was revised down by 7,000, from +263,000 to +256,000. With these revisions, employment gains in October and November combined were 28,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

| Upcoming Changes to Household Survey Data |

Effective with the release of The Employment Situation for January 2023 on February 3, 2023, new population controls will be used in the household survey estimation process. These new controls reflect the annual update of population estimates by the U.S. Census Bureau. In accordance with usual practice, historical data will not be revised to incorporate the new controls. Consequently, household survey data for January 2023 will not be directly comparable with data for December 2022 or earlier periods. A table showing the effects of the new controls on the major labor force series will be included in The Employment Situation for January 2023.

| Upcoming Changes to Establishment Survey Data |

Effective with the release of The Employment Situation for January 2023 on February 3, 2023, nonfarm payroll employment, hours, and earnings data from the establishment survey will be revised to reflect the annual benchmark process and updated seasonal adjustment factors.

In addition, the basis for industry classification in the establishment survey will be revised from the 2017 North American Industry Classification System (NAICS) to NAICS 2022. Approximately 10 percent of employment will be reclassified into different industries as a result of the NAICS revision. The conversion to NAICS 2022 will result in major revisions reflecting content and coding changes in the retail trade and information sectors, as well as minor revisions reflecting content and coding changes within the mining and logging, manufacturing, wholesale trade, financial activities, and other services sectors. Many industry titles and descriptions will also be updated to better reflect official NAICS titles.

Revisions due to both the NAICS 2022 conversion and the benchmark process will affect more historical data than is typical in the annual benchmark process. The NAICS revisions will be reflected in the entire time series of affected industries for both seasonally adjusted and not adjusted data. 

Upcoming Changes to The Employment Situation News Release

Effective with the release of The Employment Situation for January 2023 on February 3, 2023, the U.S. Bureau of Labor Statistics will introduce changes to The Employment Situation news release establishment survey data tables (Summary table B and tables B-1 through B-9). A listing of all series changes resulting from the NAICS update, including the industries published in these news release tables, is available on the BLS website at www.bls.gov/web/empsit/cesnewseries.htm.

Revision of Seasonally Adjusted Household Survey Data

At the end of each calendar year, BLS updates the seasonal adjustment factors for the national labor force series derived from the household survey. As a result of this process, seasonally adjusted data for January 2018 through November 2022 were subject to revision. (Not seasonally adjusted data were not subject to revision.) 

Source: www.bls.gov