The upcoming monthly US jobs report, set to be released on Friday, is anticipated to reveal a lack of hiring across several industries, as employment gains become increasingly concentrated in specific sectors.
Economists, led by Anna Wong, predict that the report will likely indicate the addition of 140,000 workers to payrolls in December, with significant job gains concentrated in government, healthcare, and leisure and hospitality sectors. The economists also anticipate that employment in most industries would have remained relatively flat, and some sectors might have experienced negative job growth.
Recent data signals a gradual cooling in the labor market without a surge in layoffs, a trend associated with more severe downturns. A Bureau of Labor Statistics report published on Wednesday noted a decline in job openings in November, reaching the lowest level since early 2021. The share of Americans quitting their jobs also decreased to the smallest since September 2020.
Additionally, weekly Labor Department figures on unemployment insurance applications published on Thursday showed that initial claims fell in the last week of 2023 to the lowest level since October.
In terms of expectations for the upcoming report, Wong and her team project that the unemployment rate climbed to 3.9% in December, with average hourly earnings increasing by just 0.2% from the previous month. These projections are generally more pessimistic than the median estimates in a Bloomberg survey of external forecasters.
Despite the recent shift in the Federal Reserve’s stance away from additional interest-rate increases and toward potential easing in 2024, the Bloomberg economists remain cautious, stating that their base case is for a persistent increase in the jobless rate this year.
