The U.S. labor market is likely to remain strong in the coming months, according to monthly employment trends indicators, indicating that the softening seen in the middle of last year is temporary.
The Conference Board's employment trends index rose to 109.7 from a downwardly revised 109.45 in December, a private research group said Monday.
“The ETI extended its streak of gains to three months in December,” said Conference Board economists. mitchell burns. “The index ended 2024 at its highest level since June, suggesting that the steady labor market normalization seen since 2022 may have reached its nadir in mid-2024. The slight improvement in the ETI since then reflects the resilience of the labor market into 2025. ”
The Conference Board's Employment Trends Index is comprised of a variety of labor market indicators. As the index increases, employment is also likely to increase. If the economy declines, employment is likely to decline.
On Friday, the Labor Department said the U.S. added 256,000 jobs in December, more than 100,000 more than economists expected. The unemployment rate fell by a tenth of a percentage point to 4.1%. A job openings and turnover survey released by the Labor Department early last week revealed that the total number of job vacancies unexpectedly jumped to 8.1 million at the end of November.
Conference B Ord said the rise in the index was due to increased confidence in the current state and future of the labor market. The percentage of consumers who said it was difficult to find a job fell for the third consecutive month, from 18.6% in December to 14.8% in December.
“December's statistics highlight that the labor market remains on stable footing even after a long period of normalization during the post-pandemic recovery,” Burns said. “High employment and wage growth continue to support strong consumer spending, and we expect labor demand to remain stable as businesses await an uncertain policy and economic environment next year.”
A strong labor market has investors pulling back from expectations that the U.S. Federal Reserve will cut interest rates multiple times this year. The price of federal funds futures, a swap that allows investors to bet that the Fed will cut rates, suggests the Fed may cut rates only once this year and not at all. At the end of last year, the market was pricing in up to four production cuts this year.
