The November jobs report came in fairly close to expectations with respect to topline employment growth. Beyond the headline, the report was stronger still. Job gains were somewhat more evenly distributed, hours and wages accelerated (which can be a bit of double-edged sword, though perhaps less so most recently). Employers in November added 199,000 jobs, with private-sector payrolls gaining 150,000 jobs, while the unemployment rate fell to 3.7 percent. The labor force participation rate rose to 62.8 percent.

Here is a brief summary of the major economic indicators since the last jobs numbers:

• The Producer Price Index for final demand was unchanged in November;
• The Consumer Price Index increased 0.1 percent in November;
• Real average hourly earnings increased two cents from October to November;
• Orders for durable goods (including defense and aircraft) increased 5.4 percent in November;
• New home sales decreased 12.2 percent in November;
• The Price Index of U.S. imports decreased 0.4 percent in November;
• ISM Services Index increased 0.9 percentage points to 52.7 percent in November;
• ISM Manufacturing Index increased 0.7 percentage points to 47.4 in December;
• Consumer Confidence Index increased 9.7 points from 101.0 to 110.7 in December;
• ADP reported private sector employment increased by 164,000 jobs in December.

Gordon’s Guesstimate: December Jobs

For many readers, the first week of 2024 likely inspired more fond recollection of last year than optimism. Friday’s jobs report will provide one last parting look at the year’s labor market. 2024 may offer global conflict and further deterioration in the nation’s finances, capped by the worst political sequel in modern memory, but Friday’s last glance at 2023 is likely to be a relatively fond farewell.

Since last December, about 3.5 million workers joined the labor force, but the unemployment rate only ticked up 0.2 percentage points, keeping it below 4 percent for the year. This was because of the seemingly inexhaustible appetite for labor in 2023: Employers added 2.5 million workers to their rolls. Nevertheless, as of the most recent data, but for the pandemic-era, employers are posting record job openings.

To be sure, there has been a modest decline in the pace of hiring and labor demand. Yearly growth in the index of aggregate weekly payrolls, a good proxy for overall labor demand, is about 60 percent of what it was at the beginning of the year, but nevertheless is historically high. The pace of hiring has downshifted over the year but remains quite steady. Indeed, the average rate of monthly hiring is essentially the same over the last three months as over the prior six months (in fact slightly higher).

There is nothing to indicate that the last month of 2023 will be a break from this trend. Indeed, the sweep of indicators since last month’s report is slightly stronger. The major ISM indices are improved (though manufacturing remains in contraction), while unemployment insurance claims declined over the course of December. ADP is reporting a private-sector gain that seems well within the realm of reason. The report has been closer to the BLS print of late but remains a somewhat fickle predictor since the survey’s methodology changed. There is only so much insight one can glean about public sector hiring and separations, but observers should note that former Rep. George Santos’s expulsion from Congress will be reflected in December’s report, and thus we can be sure that NAICS code 921120 (Legislative Bodies) will be down at least one employee.

For the December jobs report, this guesstimator is assuming employment will rise by 195,000. Unemployment should stay at 3.7 percent while average hourly earnings should rise by 9 cents for a 3.9 percent yearly gain.