Labor Market Stays Hot As We End 2022

Jerome Powell can not be happy with labor market as 2022 came to a close. The economy created 235,000 jobs in the final month of the year thanks to the South and medium and small companies, according to the ADP National Employment Report.

• The service-providing sector was responsible for most of the jobs creating 213,000 in December thanks to a huge boom in leisure/hospitality (+123k) as well as a good bump in professional/business services (+52k) and education/health services (+42k).

• The goods-producing sector saw 22,000 new jobs in December thanks entirely to construction which reported 44,000 new jobs while natural resources/mining and manufacturing lost 14k jobs and 5k jobs, respectively.

Booming South. The South had an absolutely stellar December creating 253,000 jobs which was unfortunately somewhat offset by the West losing 142k jobs thanks to the continued route in Silicon Valley.

• The Midwest created 70k jobs and the Northeast added 54k.

ADP wasn’t the only data set showing a hot labor market on Thursday. The Department of Labor reported that initial jobless claims defied economist projections and fell to the lowest level since September.

• The advance figure for seasonally adjusted initial claims was 204,000 in the week ending December 31st. This is a drop of 19k from the prior week and is the lowest level since claims fell to 190k at the end of September.

Swing & A Miss. Economists projected that claims would rise slightly to 225k.

Continuing Claims. The advance number for seasonally adjusted insured unemployment during the week ending December 24 was 1,694,000. a decrease of 24,000 from the previous week’s revised level.

BOTTOM LINE: All this data on top of the JOLTS report on Wednesday is not good news for anyone who thought the labor market was starting to cool along with temperatures.