U.S. employers added a whopping 216,000 jobs in December, a surprisingly large increase that will likely raise questions about when the Federal Reserve will start cutting interest rates this year. .
Refinitiv data showed payrolls grew last month by a faster-than-expected 199,000 in November, and well above the 170,000 increase expected by economists.
The figures represent an average monthly salary increase of 232,000 over the past 12 months. This is a strong number given the economy's persistently high inflation and Americans experiencing the highest borrowing rates in 22 years.
Data released by the Bureau of Labor Statistics on Friday showed the unemployment rate was unchanged at 3.7%, one notch lower than the 3.8% expected by economists polled by Refinitiv.
Average hourly wages, a key measure of inflation, rose 15 cents, or 0.4% over the month, to $34.27.
Over the past 12 months, hourly wages have increased by 4.1%.
The advance comes just after New York City's minimum wage increase went into effect, raising the minimum wage in New York City, Long Island and Westchester County by $1, from $15 to $16.
For the rest of New York, which is one of 22 states to raise the minimum wage in the new year, the new minimum wage will increase from $14.20 to $15.
Labor Department statistics show November's employment growth was revised down by 26,000 people, and October's figure was revised down by 45,000 people.
The rise came as a surprise to economists who had expected the labor market to soften, which would make Federal Reserve officials more likely to cut interest rates.
The Fed raised its benchmark federal funds rate to a 22-year high from 5.25% to 5.5% in hopes of pushing inflation down to its coveted 2% target.
But over the past year, the labor market has remained surprisingly resilient. December's numbers show that this trend may continue longer than expected.
Job openings unexpectedly slowed to 8.7 million at the end of November, the lowest level since March 2021, according to a separate report released by the Labor Department on Tuesday.
This figure is down from the downwardly revised 9.3 million job openings announced last month, and signals wavering confidence in the job market.
The drop was sudden for economists, but it confirms recent data from the American employment website Indeed, which found that as of December 29, 2023, job openings on the site had increased by 15% compared to the previous year. It is clear that the number has decreased.
Following the release of the latest Consumer Price Index (which tracks changes in the cost of everyday goods and services and showed U.S. inflation rose 3.1%) in November, Federal Reserve Chairman Jerome Powell announced a historic He said it was likely that monetary tightening had ended.
Mr. Powell matched the report with predictions from all 19 policymakers, with near consensus that borrowing costs will fall by up to three times in 2024.
Fed policymakers didn't want to take further rate hikes off the table, but he said in a press conference after the last policy meeting in 2023 that this was no longer the central bank's “baseline scenario.” Ta.
The December CPI report is scheduled to be released on January 11th.
Central bankers will decide whether to keep interest rates unchanged at 5.25-5.5% after their next two-day meeting, which ends on January 31st.
