The U.S. private sector witnessed a net gain of 400,000 jobs during the fourth quarter of 2022, according to the latest report by the U.S. Bureau of Labor Statistics. Despite a decrease in gross job gains, the difference between job gains and losses resulted in a modest expansion of employment. The service-providing industries emerged as the primary drivers of job growth, contributing significantly to the positive outcome.
During the period from September 2022 to December 2022, the total gross job gains from opening and expanding private-sector establishments were 8.0 million. However, this marked a decrease of 769,000 jobs compared to the previous quarter, reflecting a slowdown in hiring activities. Gross job gains represent 6.2 percent of private-sector employment, indicating a challenging employment landscape during the said quarter.
The report also revealed that gross job losses from closing and contracting private-sector establishments rose to 7.6 million, indicating a setback in employment stability. This figure represents an increase of 133,000 jobs lost from the previous quarter, underscoring the uncertainty faced by businesses during the mentioned period.
Despite the challenges posed by decreased gross job gains and increased gross job losses, the net employment gain for the private sector stood at 400,000 jobs. This figure highlights the resilience of the economy and the ability of businesses to adapt during challenging times.
Among the 13 industry sectors analyzed, the service-providing industries took the lead in job growth, contributing significantly to the net employment gain. These industries collectively added 375,000 jobs, reinforcing their crucial role in driving economic recovery and expansion.
In the fourth quarter of 2022, firms with 1 to 49 employees experienced a net employment increase of 166,000 jobs. Firms with 50 to 249 employees fared slightly better with a net employment gain of 146,000 jobs. Meanwhile, larger firms with 250 or more employees saw a net employment increase of 64,000 jobs.
The report highlighted that gross job gains surpassed gross job losses in 42 states, the District of Columbia, Puerto Rico, and the Virgin Islands during the fourth quarter of 2022. This regional variation indicates diverse economic conditions across different parts of the country.
The number of establishment births decreased slightly by 5,000, totaling 341,000 establishments in the fourth quarter of 2022. However, these new establishments still accounted for 1.0 million jobs, suggesting the continued importance of new business creation for job growth. Establishment deaths data, available until the first quarter of 2022, showed a decrease in job losses, indicating some stabilization in this aspect.
Despite facing challenges in the form of reduced gross job gains and increased gross job losses, the U.S. private sector managed to add 400,000 jobs during the fourth quarter of 2022. The service-providing industries played a crucial role in driving this growth, emphasizing their significance in the nation's economic recovery. As businesses continue to adapt and new establishments contribute to job creation, the overall employment landscape shows signs of resilience and potential for further expansion.