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The U.S. economy added 256,000 jobs in December, ending 2024 with another month of big job gains.
The unemployment rate fell from 4.2% to 4.1%, ending the year showing a return to pre-pandemic levels, according to Bureau of Labor Statistics data released Friday.
The final 2024 employment report highlights how the U.S. labor market has turned the corner since the pandemic, but there is much uncertainty about what 2025 will bring to the labor market trajectory. Yes, and part of the reason is because of the potential policies of President-elect Donald Trump. Changes related to trade, immigration, taxes, and federal employees.
Including the revised December increase, the economy will add about 2.2 million jobs in 2024, for an average of 186,000 jobs per month. This is in line with the annual total from 2017 to 2019, but has slowed from the explosive growth seen during the recovery from the pandemic the previous year.
The United States has now increased employment for 48 consecutive months, tied for the second-longest period of job growth in history.
Economists had expected a net gain of 153,000 jobs and an unemployment rate of 4.2%, according to FactSet.
U.S. stock futures fell sharply after the better-than-expected report, and Dow futures fell nearly 400 points before settling slightly higher. The yield on the 10-year U.S. Treasury rose to 4.7% as traders worry that strong economic data and a strong economy could prompt the Federal Reserve to pause its rate-cutting campaign.
December's jobs report was expected to provide a more direct indication of the health and trajectory of the labor market following two distorted reports. November saw a significant increase as it included the return of missing workers.
Still, economists say December is likely to have been chaotic as well.
Robert Frick, corporate economist at Navy Federal Credit, said the continued hurricane-related recovery and seasonal dynamics (the retail industry lost 29,200 jobs in November, followed by a 40,000 job loss last month) 3,400 jobs) was likely factored into December's higher-than-expected growth. Union.
“The headline numbers are largely due to the post-hurricane recovery, and the employment coverage remains narrow,” Frick wrote in a commentary Friday. “The usual suspects, health care and government, once again delivered the biggest gains. Retail employment expanded, but this is a seasonal phenomenon. Still, the positive report suggests that economic expansion continues and consumption This means that their purchasing power is increasing.
The labor market has shown resilience and stability after recovering from a once-in-a-generation pandemic and overcoming the twin pressures of soaring prices and high interest rates. Unemployment remained low, employment participation increased (particularly among women and middle-aged workers), productivity increased, and wage growth outpaced inflation for 19 months.
A strong labor market stimulated consumer spending and kept the overall economy strong as inflation eased, perhaps setting the stage for the rare achievement of a “soft landing” of price stability without a recession.
Still, the job market is not impregnable. Employment growth is slowing, jobs are falling and people are unemployed for longer periods of time, raising concerns that the economic situation will worsen further.
The Fed has slashed interest rates across the board in recent months in an effort to curb inflation and maintain maximum employment. But the Fed indicated it expects the pace of cuts to ease in 2025, citing potential risks to inflation and a resilient labor market.
Lindsey Rosner, head of multisector fixed income investments at Goldman Sachs Asset Management, said a rate cut in January was unlikely given Friday's job gains.
“The U.S. labor market ended 2024 on solid footing with strong job growth, declining unemployment, and a rebound in wage pressures,” Rosner said in a statement. “Today's strong December jobs report ends any long-term employment prospects. [quarter-point] “We will cut rates in January and shift our focus to the March meeting, but further rate cuts will depend on the development of inflation.”
Wages rose 3.9% on an annualized basis in December, according to Friday's report. Pay growth has slowed in recent years, but remains above pre-pandemic levels (up about 3%).
This story is in development and will be updated.
