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U.S. employers surpass forecasters' predictions by adding 216,000 jobs in December

JUANA SUMMERS, HOST:

2023 was a good year for workers. Jobs were plentiful, wages were rising, and the high cost of living began to level off. And today we learned that employers capped off the year by adding 216,000 jobs in December. That is more than many forecasters were expecting. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: A lot of the new hires last month were in education and health care, industries that suffered a lot of burnout during the pandemic. Sarah Beck is a newly minted teacher in Ohio. She wrapped up her training just last month and applied for half a dozen jobs. She quickly had offers from four of them.

SARAH BECK: Graduated the second week of December, and then I actually started working a few days after that.

HORSLEY: Beck is now working with kindergarteners and first-graders in Ohio's Lexington School District. Public schools around the country added 19,000 jobs last month.

BECK: There is a lot of opportunity to get a job. Teacher candidates, they get almost a choice in where they go because there is so many districts trying to hire.

HORSLEY: Many local governments were slow to rehire workers coming out of the pandemic, but that's now turned around. Government employment has finally rebounded to where it was before the coronavirus struck. Health care is another growth industry, adding 38,000 jobs last month. Economist Nela Richardson, who's with the payroll processing company ADP, says nurses and doctors are almost always in demand in both good times and bad.

NELA RICHARDSON: This is not like manufacturing, an interest rate sensitive sector. Health care tends to be a little bit impervious to what what the state of the economy is because it's such an essential service.

HORSLEY: December's job growth caps off a solid year for the labor market, with employers adding a total of 2.7 million jobs. That's a slowdown from the two previous years, when many businesses hurried to replace workers they'd let go in 2020. But White House economist Jared Bernstein says the U.S. added more jobs last year than in any of the four years leading up to the pandemic.

JARED BERNSTEIN: What we're seeing is a job market that is decelerating to a more steady, stable growth rate consistent with the ongoing recovery.

HORSLEY: The unemployment rate held steady in December at a low 3.7%. It's been under 4% now for almost two full years, the longest streak of super-low unemployment in more than half a century. Ordinarily, the job market suffers when the Federal Reserve raises interest rates the way it has to curb inflation, but so far, we have not seen a sharp jump in layoffs. Even industries like manufacturing and construction that are particularly sensitive to rising borrowing costs have continued to add jobs. Factories added 6,000 jobs last month, while construction companies added 17,000. Nancy McNamara completed an internship in the building trades this past fall. She quickly found work with a weatherization contractor in Rutland, Vt. She's also had offers to work with a carpenter and a drywaller.

NANCY MCNAMARA: I like being tired at the end of the day and feeling like I accomplished something, and with work like this, that's exactly how I feel.

HORSLEY: Thanks to the tight job market, wages have been climbing. Average wages in December were up 4.1% from a year ago. For most of the last year, wages have been climbing faster than prices, giving workers a real boost in their buying power. There are some weak spots in today's jobs report. Delivery companies cut 32,000 jobs last month. And temporary help companies, which are sometimes seen as a bellwether of future employment trends, shed 33,000 jobs. Overall, though, employers are still adding more than enough jobs for those who are looking for work. And the Fed still appears to be on course for that soft landing, with lower inflation and no big jump in unemployment. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.