Employers added 223K jobs in December, but cut 1,100 in accounting

Nonfarm payrolls increased by 223,000 in December and the unemployment rate ticked downward by two-tenths of a point to 3.5%, the U.S. Bureau of Labor Statistics reported Friday, but employment in accounting and bookkeeping services fell by 1,100 jobs.

The relatively strong overall employment gains came despite a series of interest rate hikes over the past year by the Federal Reserve and expectations of more hikes this year. While several large technology companies such as Amazon, Meta, Twitter, Microsoft and Salesforce have announced layoffs recently, the overall jobs situation seems to be improving in most sectors. The 223,000 jobs added in December beat economist expectations of 202,000 and an unemployment rate of 3.7%, according to Yahoo Finance. The unemployment rate has stayed in a narrow range of 3.5% to 3.7% since March, the BLS noted. The number of unemployed people edged down to 5.7 million in December.

However, the latest jobs report indicated some signs of cooling in the labor market. The 223,000 jobs added in December were the smallest gain in the past two years.

Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance. Employment in professional and business services declined by 6,000 jobs in December, however.

Average hourly earnings rose by 9 cents, or 0.3%, to $32.82, in December. Over the past 12 months, average hourly earnings have increased 4.6%, but that was the smallest increase since the middle of 2021. The average work week declined by 0.1 hour to 34.3 hours in December. 

Andrew Harrer/Bloomberg

The BLS also revised downward some of the employment gains from the past two monthly reports. The change in total nonfarm payroll employment for October was revised down by 21,000, from a gain of 284,000 jobs to 263,000 jobs, and the change for November was revised down by 7,000, from 263,000 to 256,000 jobs. With both revisions, employment gains in October and November combined were 28,000 lower than previously reported. 

Despite job gains across the overall economy, the accounting profession has been losing jobs in recent years. The Wall Street Journal reported last week that over 300,000 accountants and auditors have departed their jobs in the past two years, a decline of 17%. Their ranks are not being filled by enough students either, with the number of U.S. students who completed a bachelor's degree in accounting falling almost 9% to approximately 52,500 in 2020, down from almost 57,500 in 2012, according to figures from the AICPA.

President Biden hailed the jobs report in a statement Friday: "Today's report is great news for our economy and more evidence that my economic plan is working.  The unemployment rate is the lowest in 50 years.  We have just finished the two strongest years of job growth in history. And we are seeing a transition to steady and stable growth that I have been talking about for months. We still have work to do to bring down inflation, and help American families feeling the cost-of-living squeeze. But we are moving in the right direction."