The U.S. job market ended 2023 on a strong note as 216,000 jobs were added to the economy during December, the Bureau of Labor Statistics said.
Including December figures, the U.S. economy added 2.7 million jobs in 2023.
The unemployment rate remained low and stable throughout the year, as well. December’s unemployment rate finished at 3.7%, marking the best year-end unemployment rate since 1969. The unemployment rate was unchanged from November.
The unemployment rate has remained below 4% for 23 consecutive months, the longest such streak since October 1967 through December 1969.
The new job numbers come as the Federal Reserve has expressed optimism that inflation has turned a corner. The Federal Reserve has held interest rates at a 23-year high between 5.25% and 5.5% to quell inflation.
Keeping interest rates this high generally would cause job numbers to soften, but that hasn’t been the case. Federal Reserve Chair Jerome Powell has said the Federal Reserve is trying to balance the need to reduce inflation while preventing the labor market from being stifled. In recent cases when interest rates increased, like they did in 2000 and 2007, a recession followed.
Many business leaders said before the start of last year that they expected a recession to occur in 2023, but those fears never materialized.
While Powell hasn’t said when interest rates would come down, the Federal Reserve has projected that interest rates won’t be nearly as high by the end of 2024.
Powell has stated the Federal Reserve’s goal is to get the annual inflation rate down to 2%. As of November 2023, the consumer price index was 3.1%.