Employers added 256,000 jobs in December, beating economists' expectations and indicating the job market still remains resilient in the face of higher borrowing rates and steadier-than-expected inflation.
The economy was expected to add 153,000 jobs last month, according to economists surveyed by financial-data firm FactSet. The unemployment rate fell to 4.1% in December, below forecasts that the rate would remain steady at 4.2%.
The Jan. 10 jobs report marks the last monthly employment snapshot of the Biden administration, which inherited a pandemic-hit economy. When Biden was inaugurated in January 2021, the unemployment rate stood at 6.4% while inflation was about to hit a 40-year high, prompting a flurry of interest rate hikes by the Federal Reserve to control price rises.
Under the Fed's restrictive monetary policy, the economy has cooled, which has reduced inflation, but also created some cracks in the labor market. Additionally, the incoming Trump administration's policies, if enacted, are expected to be inflationary, leading some economists to speculate that the central bank will consider cutting rates at its January 29 meeting. Can put a stop.
The strong jobs report could also ease pressure on the Fed to continue cutting rates, as Fed Chairman Jerome Powell cited some early signs of weakness in the labor market as a reason for the central bank to start cutting rates. rate cuts on September.
“The December jobs report provides a strong end to 2024 and a promising sign of what's to come in the new year,” Ger Doyle, U.S. country manager for recruiting firm ManpowerGroup, said in an email. “However, until inflation gets more under control, the labor market may face challenges, which is necessary to prevent slower hiring, layoffs and lower job growth.”
The Bureau of Labor Statistics said Friday that hiring was strongest in the health care, government and social assistance industries. Retail companies also added jobs last month after a decline in November.