Labor Force Shrinks in December

Labor Force Shrinks in December

There is less than 1 worker for every open job.
December’s job data was a mixed bag.

  • Employers added 216,000 jobs, which was above expectations. However, previous months’ jobs gains were revised down 71,000.
  • Wages rose strongly: 0.4% from November and 4.1% annually compared to December 2022.

But the labor force contracted 676,000 workers last month. There are only 0.71 workers available for every open job.

Why it matters: Usually when the economy adds jobs at a strong pace, workers come back to the labor force. The drop in the labor force could be an aberration, or it could signal that the jobs market is weakening.