Here's what to look for in the last U.S. jobs report of 2022

Amid last year's U.S. economic upheaval, the ultra-tight job market was a rare high point, with low unemployment, strong hiring and rapidly rising wages. 

The government's employment report for December, set to be released on Friday, will indicate just how good that year was. Wall Street, the Federal Reserve and businesses nationwide will be closely scrutinizing the figures to see how hot the job market has been, or whether it's showing signs of a slowdown.

Here's what they'll be looking at. 

How many jobs did the U.S. create?

Economists expect employers to have added 200,000 jobs in December, according to a survey on FactSet. That would mark a decline from the robust pace of hiring in the second half of the year, but would still indicate far stronger job creation than what is needed to keep up with population growth and to prevent unemployment from rising. 

"Announced hiring freezes began to spread in late autumn, but most companies continued to honor signed offers," Glassdoor chief economist Aaron Terrazas said in a blog post. "Combined with accelerating layoffs, the earliest signals of slower hiring are likely to be visible in the December jobs data."

Does more jobs mean more people working?

Economists will also look closely at the unemployment rate and other measures of worker health, including whether people say they're looking for work. 

The Labor Department's monthly employment report is compiled from two separate surveys — one that polls businesses and one for households — and the two have diverged in recent months. In particular, the unemployment rate is calculated from the household survey. The rate recently rose to a still-low 3.7%, but the household survey also showed that the number of Americans with jobs has dropped since early fall.

"There's uncertainty not just about what's going to happen but about what has happened in the past year," said Julia Pollak, chief economist at ZipRecruiter. "Right now, the establishment survey suggests the economy added 5 million jobs in the past year. The household survey suggests we added just half as many." 

What's happening with temp jobs?

Employment in temporary jobs is often seen as a leading indicator of the job market as a whole. Companies that are growing fast will typically turn to contract and temp workers first, before increasing their own payrolls. Conversely, companies that are cutting back find it easier to trim outside help.

"Temp help employment has been declining for three straight months, so does it decline or does it grow?" Pollak said. Another indicator is aggregate working hours, which give a hint of whether overall labor intensity is growing or flat. 

"Working hours surged in 2021 and have since been coming down. They're now right down to where they were pre-pandemic," she said. "That suggests the job market is back to normal and demand has been sagging — if that [drop] continues, that would be a sign that demand is cooling." 

What happened with worker pay?

Wage growth unexpectedly picked up in November. That's good news for workers who have been battered by inflation, but bad news for the Federal Reserve, which has signaled it wants to see workers' pay decline substantially, as it believes that will reduce inflation.

Economists will be watching the report closely to see whether November's payroll jump was real and try to guess the direction wages will go in the future.

"The cost of wages and benefits is one area where I expect to see some pressure looking forward," Gregory Daco, chief economist at EY-Parthenon, told CBS News. "That's why we expect to see wages gradually declining over this year."

What industries grow and shrink?

The technology and, to a lesser degree, finance and warehousing and transportation industries have stood out for their heavy job cuts. Just this week, Amazon said it would cut a total of 18,000 workers, while software giant Salesforce and video service Vimeo moved to slash a tenth of their workforce.

According to layoffs.fyi, there were 154,000 jobs cut in the tech sector last year. But these figures aren't yet showing up in the government's monthly reports, which reveal employment in the information industry continuing to rise. A broader report of job turnover from the government also showed no substantial increase in unemployment. That could mean laid-off tech workers are quickly finding other jobs or that they are leaving the job market altogether.

Pollak noted that the three sectors where layoffs have risen — tech, finance and warehousing — are all areas that saw a growth surge during the pandemic because of unprecedented changes like a boom in retail stock trading and a shift to working and shopping online. 

"All those conditions have now changed. We're seeing contraction, pullback, cost-cutting," she said. "It's worth monitoring, but [government] data don't suggest there's been a meaningful increase in layoffs."

In:
• United States Department of Labor
• Employment
• Unemployment

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