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    U.S. Added 216,000 Jobs in December, Outpacing Forecasts

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    Hiring has throttled back from 2021 and 2022, but last year’s growth was still impressive by longer-term standards.The U.S. labor market ended 2023 with a bang, gaining more jobs than experts had expected and buoying hopes that the economy can settle into a solid, sustainable level of growth rather than fall into a recession.Employers added 216,000 jobs in December on a seasonally adjusted basis, the Labor Department reported on Friday. The unemployment rate was unchanged at 3.7 percent.Although hiring has slowed in recent months, layoffs remain near record lows. The durability of both hiring and wage gains is all the more remarkable in light of the Federal Reserve’s aggressive series of interest rate increases in the past couple of years. But a range of analysts warns that the coast is not yet clear and says the effects of those higher rates will take time to filter through business activity.“The real test for the labor market begins now, and so far it is passing the test,” said Daniel Altman, the chief economist at Instawork, a digital platform that connects employers with job seekers.Financial commentary in the past year has been dominated by dueling narratives about the economy. Most economists warned that the Fed’s driving up borrowing costs at a historically rapid pace would send the economy into a downturn. Heading into 2023, over 90 percent of chief executives surveyed by the Conference Board said they were expecting a recession. And many leading analysts thought that price increases could soften only if workers experienced significant job losses.But the resilience of the overall economy and consumer spending has so far defied that outlook: In June 2022, inflation was roughly 9 percent. Inflation has since tumbled to 3 percent while the unemployment rate has been largely unmoved.The economy gained 2.7 million jobs in 2023.Annual change in jobs More

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    U.S. Job Growth Holds Up as Economy Gradually Cools

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    Interest rate increases have taken the edge off labor demand, but unemployment dipped in November, and wages rose more than expected.The U.S. economy continued to pump out jobs in November, suggesting there is still juice left in a labor market that has been slowing almost imperceptibly since last year’s pandemic rebound.Employers added 199,000 jobs last month, the Labor Department reported Friday, while the unemployment rate dropped to 3.7 percent, from 3.9 percent. The increase in employment includes tens of thousands of autoworkers and actors who returned to their jobs after strikes, and others in related businesses that had been stalled by the walkouts, meaning underlying job growth is slightly weaker.Even so, the report signals that the economy remains far from recession territory despite a year and a half of interest rate increases that have weighed on consumer spending and business investment. Reinforcing the picture of energetic labor demand, wages jumped 0.4 percent over the month, more than expected, and the workweek lengthened slightly.Wage growth held steady in NovemberYear-over-year percentage change in earnings vs. inflation More

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    U.S. Job Openings Dropped in October

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    The News:Job openings fell considerably in October, hitting the lowest level since March 2021, the Labor Department announced on Tuesday.There were 8.7 million job openings in October, down significantly from 9.3 million in September, according to the Job Openings and Labor Turnover Survey. That was lower than economists’ expectations of 9.3 million openings.The rate of layoffs was little changed, as was the rate of quitting, which generally reflects workers’ confidence in their ability to find new employment.Job openings declined significantly in October, the Labor Department said.Tony Cenicola/The New York TimesWhy It Matters: The state of the labor market affects interest rate policy.The labor market is closely watched by the Federal Reserve as it mulls its interest rate policy. A cooling labor market tends to fuel predictions that the Fed will not further increase rates, which have risen to a range of 5.25 to 5.5 percent from nearly zero in March 2022.The labor market has been surprisingly resilient since the Fed started its rate increases in a campaign to tame inflation. But as the job market shows signs of cooling, so has consumer spending. Many companies told investors that in the most recent quarter customers were pulling back and spending less on products and more on services and experiences. The Fed’s preferred inflation measure confirmed that consumer spending slowed in October.At the same time, investors are increasingly hopeful that the Fed is done raising rates. Jerome H. Powell, the chair of the Federal Reserve, recently suggested in a speech that the central bank would leave rates steady if data continued to point to a cooling economy. The 10-year U.S. Treasury yield fell on Tuesday, reaching its lowest point since September, as investors expected interest rates to fall in the future.A reduction in job opportunities discourages the Fed from raising rates or keeping them high too long because such a trend often foreshadows a recession. “With this evidence coming in that the labor market is cooling substantially, I think it’s raising the chances that the Fed is done with the rate hikes,” said Julia Pollak, chief economist at ZipRecruiter.Background: Unemployment and openings have reverted to earlier levels.Though the labor market is slowing, it remains a healthy landscape for workers. The unemployment rate ticked up in October, to nearly 4 percent, which is in line with prepandemic levels.Job openings reached a record of more than 12 million in March 2022 and have trended down since. The last time job openings hovered around nine million — where it is now — was in the spring of 2021.There are still ample opportunities for workers. The rate of hiring remained steady in October despite the decline in openings.One difference is that layoffs are lower than they were before the pandemic. That probably reflects companies’ decisions to reduce staffing by natural attrition rather than cuts.“This is perhaps the biggest sign that we still have a strong economy and labor market,” said Sonu Varghese, a strategist at Carson Group, a financial advisory firm.Though inflation has slowed significantly since the Fed started raising rates in March 2022, it remains above the central bank’s 2 percent target.The Fed’s preferred inflation measure fell to 3 percent in October from a year earlier. But without including food and fuel prices, which are volatile and less sensitive to the Fed’s policy actions, the rate was 3.5 percent.What’s next: The November jobs report comes on Friday.The November jobs report will be released on Friday by the Labor Department. Economists forecast that the unemployment rate will stay around 4 percent, with a gain of about 180,000 jobs.That report will be one of the last insights into the state of the labor market before the Fed’s next policy meeting on Dec. 12 and 13. More

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    Job Growth Slows, Sowing a Mix of Concern and Calm

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    U.S. employers added 150,000 workers in October, falling short of expectations, but the labor market retains spark nearly three years into a recovery.The labor market has been relentlessly hot since the U.S. economy began to recover from the shock of the pandemic. But there are signs of cooling as the holidays approach.Employers added 150,000 jobs in October on a seasonally adjusted basis, the Labor Department reported on Friday, a number that fell short of economists’ forecasts.Hiring figures for August and September were revised downward, subtracting more than 100,000 jobs from earlier reports. And the unemployment rate, based on a survey of households, rose to 3.9 percent from 3.8 percent in September.Unemployment ticked up in OctoberUnemployment rate More

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    JOLTS Report Shows Job Openings Up, Shaking Markets

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    The NewsThe number of job openings rose in August, the Labor Department reported on Tuesday, after three consecutive months of falling numbers.There were 9.6 million job openings in the month, up from a revised total of 8.9 million in July, according to seasonally adjusted figures in the latest Job Openings and Labor Turnover Survey, known as JOLTS. The increase was larger than expected.Investors balked at the fresh numbers, fearful that they would signal to the Federal Reserve that the economy was still running too quickly, requiring even higher interest rates to slow it.Construction workers at an apartment building in Oakland, Calif.Jim Wilson/The New York TimesWhy It Matters: The economy nears prepandemic measures.Job openings are closely monitored by the Fed, which has tried to fight inflation over the past 19 months by increasing interest rates, aiming to cool the economy and reduce labor demand, though it took a pause at its most recent meeting.“The Fed won’t make policy decisions based on one JOLTS report, but it does keep the risks tilted toward another rate hike,” Nancy Vanden Houten, lead U.S. economist for Oxford Economics, said of the August increase in job openings.The S&P 500 slumped 1.4 percent, while the yield on the 10-year Treasury bond, a crucial benchmark interest rate around the world, rose 0.1 percentage points to 4.8 percent, indicative of investors’ betting on stronger growth ahead.Job openings have gradually come down from the 12 million recorded in April 2022, while the rate of workers leaving their jobs is down by nearly a percentage point, approaching what it was right before the pandemic. Openings rose in August, but because unemployment also ticked up, the number of openings per unemployed worker was flat, at around 1.5.“The labor market is tight, but it’s easing, and gracefully so,” said Mark Zandi, the chief economist at Moody’s Analytics. He added that slowdowns in monthly job growth, wage growth and hours worked, along with businesses using fewer temporary workers, all pointed to a cooling of the labor market.And so far, the labor market and economy have managed to throttle back without a big jump in unemployment, indicators of a so-called soft landing.The rate of people quitting their jobs, a measure of workers’ confidence in the labor market, was unchanged in August at 2.3 percent.Layoffs have also been flat, suggesting that employers are reluctant to part ways with workers in a tight labor market. And though overall inflation sped up, driven largely by increases in fuel costs, the Fed’s preferred measure of inflation slowed.Background: A resilient economy faces some headwinds.Despite the moderate uptick in job openings, there are still some potential headwinds on the horizon.Because there’s a lag in the JOLTS report, labor stoppages like the United Automobile Workers union strike, which now involves around 25,000 workers, are not captured in the data. And though a government shutdown was narrowly avoided over the weekend, one could happen next month, potentially taking thousands of government employees off payrolls and sapping consumer spending.Other factors that indicate softening demand are the resumption of mandatory student loan repayments and higher oil prices, which have in turn spooked the stock market. The economy, which had a strong third quarter of growth, could see a slowdown to close the year.What matters more than the JOLTS report is the Fed’s projection of the unemployment rate, said Preston Mui, a senior economist at Employ America, a research and advocacy group focused on the job market. The Fed last month revised its median estimate of unemployment by the end of 2023 to 3.8 percent, down from a June projection of 4.1 percent. That suggests the Fed does not view a tight labor market as a problem it needs to fix with further rate increases, Mr. Mui said.Mr. Zandi cautioned against declaring a soft landing until the Fed starts to roll back interest rates. But given the gradual slowdown so far, and with financial conditions tightening overall, he said the Fed should be pleased with its progress.What’s Next: The September jobs report on Friday.September’s jobs report will be released on Friday by the Labor Department.The consensus estimate is that the economy added 170,000 jobs in September, according to Bloomberg, and that the unemployment rate declined to 3.7 percent from 3.8 percent.Joe Rennison More

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    Wages Rose Only 0.2% in August, Easing Inflation Fears

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    American workers got smaller pay increases in August. That could be welcome news for policymakers at the Federal Reserve.Average hourly earnings rose 0.2 percent from July, the slowest pace of monthly growth since early last year. Pay was up 4.3 percent from a year earlier, versus a peak growth rate of nearly 6 percent in March 2022.The earnings data is preliminary and can be skewed by shifts in the industries that are hiring, among other factors. But the slowdown in wage gains is consistent with other evidence suggesting a gradual cooling in the labor market. Employers are posting fewer job openings — a sign of reduced demand for labor — and workers are changing jobs less frequently, a sign they are also becoming more cautious.For workers, the pain of slower wage growth is being offset, at least to some degree, by cooling inflation. Price increases outpaced pay gains for much of last year, but that trend has since reversed. Pay, adjusted for inflation, has risen in recent months; the Labor Department will release August price data later this month.For policymakers, a cooler pace of wage growth — if it is sustained — would be an encouraging sign that the labor market is coming off the boil. Fed officials have been worried that rapid wage gains, while not responsible for the recent increase in prices, could make it difficult for inflation to return to their long-term goal of 2 percent per year. The data released Friday suggests that the labor market is returning to balance — though hourly earnings are still rising faster than many economists consider sustainable in the long term.“While wage growth remains well above the Fed’s comfort zone, recent data points to a gentle moderation in labor cost pressures amid signs of labor market rebalancing,” Gregory Daco, chief economist for EY, wrote in a note to clients. More

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    Labor Dept. Proposes Vast Expansion of Overtime Eligibility

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    The Biden administration seeks a threshold of about $55,000 in annual pay under which salaried workers must receive overtime, up from $35,500.In a move that could affect millions of workers, the Biden administration announced Wednesday that it was proposing to substantially increase the cutoff below which most salaried workers automatically receive time-and-a-half overtime pay.Under the proposed rule, issued by the Labor Department, the cutoff for receiving overtime pay after 40 hours a week would rise to about $55,000 a year from about $35,500, a level that was set during the Trump administration.About 3.6 million salaried workers, most of whom fall between the current cutoff and the new one, would effectively gain overtime pay eligibility under the proposed rule, the department said.Julie Su, the department’s acting secretary, said in a statement that the rule “would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections.”The department estimated that the rule would result in a transfer of $1.2 billion from employers to employees in its first year.Some industry groups, particularly in retail, dining and hospitality businesses, have argued that expanded overtime eligibility could lead many employers to convert some salaried workers to hourly workers and set their base wage so that their overall pay, with the usual overtime hours, would be unchanged.These groups argue that vastly expanding overtime eligibility could also discourage employers from promoting workers to junior management positions that provide a path to well-paying careers, because more employers would be compelled to pay junior managers overtime when they worked long hours.“To prevent these employees from triggering new overtime costs, many small businesses will be forced to demote them back to hourly wage earners, reversing their hard-earned career progression,” Alfredo Ortiz, the president and chief executive of Job Creators Network, a group that promotes the interests of small businesses, said in a statement.The proposal follows a similarly ambitious move by the Obama administration in 2016, which sought to raise the overtime cutoff for most salaried employees to about $47,500 from about $23,500. But just before Donald J. Trump took office as president, a federal judge in Texas suspended the Obama rule, concluding that the Labor Department lacked the legal authority to raise the overtime cutoff so substantially.The Trump administration later installed the $35,500 limit.Under the Biden administration’s proposal, the overtime limit would automatically adjust every three years to keep pace with rising earnings. The Labor Department will accept public comments for 60 days before issuing a final version of the rule.Advocates of a higher cutoff argue that one key benefit would be to prevent employers from misclassifying workers as managers to avoid paying them overtime.Under the law, employers do not need to pay overtime to workers who make above the salary cutoff if they are bona fide executives or managers, meaning that their primary job is management and that they have real authority.But research has shown that many companies illegally deny workers overtime by raising their salaries just above the overtime cutoff and simply labeling them managers, even if they do little managerial work.Because the legal definition of an overtime-exempt manager can be somewhat subjective, and because many salaried workers aren’t aware that they are eligible for overtime pay if they make more than the cutoff, they typically do not challenge employers who game the system in this way. The result is that many assistant managers at fast food restaurants or retail outlets have been denied overtime pay even though the law typically required that they receive it.Raising the salary threshold would make this practice less common by eliminating the subjectivity in determining which workers should receive overtime pay. Instead, many workers — like assistant managers in restaurants — would become eligible for overtime automatically, no matter their job responsibilities.The proposal is the latest effort by the Biden administration to increase pay and protections for workers. President Biden has been outspoken in his support of labor unions, and issued an executive order requiring contractors on federal construction projects worth more than $35 million to reach agreements with unions that determine wages and work rules.The major climate bill that Mr. Biden signed last year included incentives for clean energy projects to pay wages that are similar to union scale.But the proposed overtime rule could face legal challenges like the ones that derailed the Obama-era rule, suggesting that the president’s rationale for the proposal may be as much about communicating his support for workers during the 2024 presidential campaign as it is about significantly expanding eligibility for overtime.In an interview this year, Seth Harris, a former deputy labor secretary who recently served as a senior labor adviser to Mr. Biden, said some administration officials worried that a judge would set aside the rule, but added, “There are others whose offices are physically closer to the president who say, ‘No, no, no, this District Court judge doesn’t tell us how we do our business.’” More

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    Job Openings Dropped in July as Labor Market Cooled

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    The NewsThe number of job openings continued to drop in July, the Labor Department reported Tuesday, another sign that the U.S. labor market is losing its momentum.There were 8.8 million job openings last month, down from about 9.2 million in June and the lowest level since March 2021, according to the Job Openings and Labor Turnover Survey. The amount of people quitting their jobs, a measure of workers’ confidence in the job market, continued to nudge down in July as well.A job fair in Minneapolis last month.Tim Gruber for The New York TimesWhy It Matters: Implications for interest-rate policy.Labor market data is closely watched by policymakers at the Federal Reserve as they combat stubborn inflation.“For workers, this looks like fewer opportunities — if you leave your job now, you’re less likely to land a better one than you were last year at this time,” Elizabeth Renter, a data analyst at the personal finance site NerdWallet, said in an email statement. “For the Fed, this likely looks according to plan.”Fed policymakers lifted interest rates to a range of 5.25 to 5.5 percent in their last meeting in July, the highest since 2001. Only one Fed meeting has passed since March 2022 where the central bank has not raised rates. Some investors hope that signs the labor market is continuing to cool will push the Fed to end its campaign of rate increases sooner.Jerome H. Powell, the chair of the Federal Reserve, signaled on Friday that the central bank was not ruling out more rate increases.“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Mr. Powell said at the Federal Reserve Bank of Kansas City’s annual Jackson Hole conference in Wyoming.The new data is likely to be welcomed by the Fed, said Layla O’Kane, a senior economist at Lightcast, a labor market analytics firm. It shows that what the Fed has been doing is working, but policymakers are not likely to declare their mission accomplished just yet, she said.“This is a really good sign for a cooling labor market, but it’s not a cool labor market yet,” Ms. O’Kane said. “There’s some way to go before we think we solved some of the labor market tightness.”Background: A surprisingly robust labor market.The U.S. labor market has defied expectations by remaining strong despite the Fed’s mission to slow down the economy by raising interest rates.Consistently strong labor data initially fueled predictions that the Fed would continue rate increases until the economy fell into a recession. Many have taken a more optimistic view recently as inflation has begun to moderate alongside a strong labor market.Employers are starting to feel the effects of high interest rates, said Julia Pollak, chief economist at ZipRecruiter. Companies are being more judicious in their hiring even if they need more people, in part because of the high cost of labor, she said.“With interest rates this high, some investments don’t pencil out,” Ms. Pollak said. “Businesses that would have opened another location or invested in another truck or another warehouse are taking it slow.”What’s Next: The August jobs report on Friday.The August employment report will be released by the Labor Department on Friday.The unemployment rate dropped to 3.5 percent in July, a sign that although the labor market is cooling, workers are generally still able to find opportunities. The unemployment data for August will be one of the last labor market pulses that Fed policymakers will get before their next meeting on Sept. 19-20. More