Low unemployment rate recorded in 2022
In 2022, the labor market witnessed a historic low in the total unemployment rate, solidifying its resilience after the pandemic-induced shocks. Amidst a surge in job openings and the prevalent Great Resignation, the government’s annual “Work Experience of the Population” report, released by the Bureau of Labor Statistics, unveiled remarkable insights into the year.
The annual jobless rate for 2022, known as the “work-experience unemployment rate,” reached an unprecedented 7.6%, making it the lowest yearly unemployment rate ever recorded. This report, released on Tuesday, provides a comprehensive overview of the labor market throughout the entire year.
The data reveals a substantial decrease in the number of individuals experiencing unemployment in 2022 compared to the previous year. Approximately 13 million people faced unemployment in 2022, down from 16.1 million in 2021. Moreover, more individuals reentered the labor force, with about 171.8 million people working or actively seeking employment in 2022, marking an increase of 2.1 million from the prior year.
Despite a notable worker shortage, with more job openings than job-seeking Americans for most of the year, the labor market was robust and worker-friendly. This phenomenon, known as The Great Resignation, empowered millions to seek better working conditions and pay, creating a significant impact on the job market.
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The labor market strength extended across various demographics, as evidenced by a decline in the annual unemployment rate for women, men, and all major race and ethnic groups, according to BLS data.
While the tight labor market in 2022 played a pivotal role in revitalizing the economy after a brief pandemic-induced recession, it also had repercussions. Wages increased, and consumer spending picked up, but the labor market’s vigor may have contributed to surging inflation. In June 2022, inflation peaked at 9.1% year-over-year, reaching the highest level in 40 years.
As the labor market slightly cooled off in 2023, it remained resilient, even with the Federal Reserve raising interest rates to their highest level in 22 years to counter inflation. The November data from BLS indicates a further dip in the unemployment rate to 3.7%, down from 3.9%, and the addition of 199,000 jobs to the US economy.
