The US jobs market closed 2022 with a Bang! of sorts. Private jobs were added more than I had expected. I was wrong.
For those of you who are reading this number for the first time, is important to take this number (Economic Driver) very seriously. Slowing of this number or a decrease would generally cause everyday Americans and Traders to panic a little bit. This is because it means that more job cuts are coming, and companies are not spending on growth. This will in turn result in more job cuts.
I had predicted that the jobs numbers were going to slow down. Normally when the Interest rate go up (like we have now), companies spend less on projects and new ventures resulting in slower new hiring. This did not happen. While the big firms like Amazon, Facebook and Google have announced layoffs, the small and medium business are still sitting on cash on their balance sheets. This is why the reduction in job numbers has not yet happened. I do expect a slowdown in job numbers in Q1 2023 Let’s look at the numbers behind the number and what it means
Leisure and hospitality added 123,000 jobs. This means that folks are still travelling and being positive. I love it.
Education and health services added 42,000: This is positive too.
Professional and business services grew by 52,000: This is substantially high than before. This means that companies are hiring more a lot of contractors. This could mean that companies are being cautious too
The big jobs number must have surprised the Federal Reserve’s as it was trying to slow the market and control inflation with its interest rate hikes.