The U.S. added 256,000 jobs in December, and the unemployment rate fell to 4.1%, according to data released Friday by the Labor Department.
December employment data showed the U.S. economy outperformed year-end forecasts. Economists expect the U.S. to add 155,000 jobs and keep the unemployment rate at 4.2%, according to consensus estimates.
The new employment statistics capped a year of steady employment growth since the outbreak of the novel coronavirus disease (COVID-19) pandemic in 2020.
Under President Biden, the labor market posted record job gains, buoyed by soaring inflation and slowed by the Federal Reserve's high interest rates. But the job market recovery that had already begun during President-elect Trump's first term did little to sell Biden's economic policies to voters weary of inflation.
With Trump set to take office later this month, the Federal Reserve is currently weighing the potential impact of his economic policies on the central bank's efforts to curb inflation.
The Fed cut interest rates three times at the end of 2024 as price increases peaked, but bankers are wary of a spike in inflation caused by President Trump's proposed trade and immigration policies. are.
The U.S. labor market appears to remain active, and December's surge in employment could force the Fed to slow its rate cut plans.
Federal Reserve President Christopher Waller on Wednesday expressed confidence that the central bank can proceed with its planned rate cuts despite strong economic data and rising inflation.
“We believe that inflation will continue to move toward our 2% target over the medium term and continue to do so.” [interest rate] The cuts would be appropriate,” he said at an Organization for Economic Co-operation and Development (OECD) event in Paris.
But December's jobs report is the latest sign that the economy remains strong despite rising borrowing costs.
According to the newspaper, in financial markets there is a 97% chance that the Federal Reserve will keep interest rates unchanged later this month, and a 74% chance that they will keep them unchanged in March. CME Group Federal Watch Tool.
Updated at 8:57am
