US Adds 223,000 Jobs In December, Unemployment Drops to 3.5%

The U.S. economy added 223,000 jobs In December, beating estimates of 200,000 jobs.

This number represents a dip from November, which saw an increase of 256,000 jobs and from October, which saw an increase of 263,000 jobs, according to a newly revised figure from the Bureau of Labor Statistics on Friday. As inflation soars, the job market has stayed tight as wages increase across various industries, even as the Federal Reserve looks to curb demand and inflation.

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The unemployment dropped slightly from November to 3.5%, with 5.7 million people unemployed. In November, the unemployment rate was 3.7%.

Notable job gains were present across leisure and hospitality, health care, construction and social assistance.

Retail employment edged up slightly in December by 9,000 jobs. Throughout 2022, job growth in retail trade averaged 16,000 per month, which is less than half of the average growth of 35,000 per month in 2021.

Average hourly earnings rose by 9 cents, or 0.3%, to $32.82 in December. Over the past 12 months, average hourly earnings have increased by 4.6%. Meanwhile, inflation continues to soar while showing some signs of improvement. Consumer prices rose by 7.1% in November compared to last year, according to the U.S. Bureau of Labor Statistics. This marked the smallest 12-month increase since the period ending in December 2021.

And the Adobe Digital Price Index, which measures online inflation, has observed falling online sales over 2021 since September 2022. In November, online prices dropped 1.9% year over year, the steepest annual drop in 31 months since May 2020.

The strong labor market and rising wages have bolstered consumer spending overall amid inflation. Online holiday sales were up 3.5% year over year during the period between Nov. 1 and Dec. 31, according to new data released by Adobe Analytics. Shoppers spent a total of $211.7 billion online during the holiday shopping period, which set a new record for e-commerce sales during the holidays.

As for total U.S. sales during the holidays, some early figures have already shown growth over last year. According to early figures from Mastercard late last month, U.S. retail sales between Nov. 1 through Dec. 24 increased 7.6% year-over-year. Black Friday was the top spending day of the holiday season this year, up 12% year-over-year.

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