Employment and Labor Market - United States - December 2024

Source - United States Federal Government

We didn’t get the post-hurricane payback in the December Employment Report that we expected. Nonfarm payroll growth accelerated to a robust 256k, far above the consensus forecast looking for a 165k job gain. This was the largest monthly nonfarm payroll gain since March and a big two consecutive month acceleration from the summer slump from June through August that prompted a big Fed rate cut in September. There was only a modest 8k downward revision to the previous two months of estimates for payrolls. This keeps the 3-month average job growth at a comfortable 170k a month, the same as in November. Private sector payrolls gained a healthy 223k jobs last month. This was a robust Employment Report that reinforces the resilience of the U.S. labor market and expansion and will keep the Fed on hold in January as they try to bring inflation pressures down.

Adding to the labor market strength and resilience narrative, the unemployment rate unexpectedly fell to 4.1% from 4.2% in November as household employment rebounded by a huge 478k. The number of unemployed fell by 235k to 6.886 million. The average duration of unemployment increased modestly to 23.7 weeks from 23.6 in November. The labor force increased by 243k, and the labor force participation rate remained at 62.5%.

Average hourly earnings growth moderated in-line with forecasts to 0.3%, while the year-on-year growth rate slipped a bit to 3.9% from 4.0% in November. Average weekly hours held at 34.3 as expected, implying solid income growth continued into December. The Fed will probably be looking for more signs of moderation in average hourly earnings growth before they feel comfortable resuming rate cuts.

Job growth rebounded on the services side of the economy even as manufacturers continued to struggle. On the goods side, manufacturing lost 13k jobs and construction added 8k jobs. On the services side, job creation remained solid for education and health care (+80k), leisure and hospitality (+43k), retail trade (+43k), professional and business services (+28k), financial services (+13k), and information (+10k).

Bottom line: The December payroll report was a master class of labor market resilience. The solid nonfarm payroll gain and decent earnings growth will keep the U.S. economic expansion on a sturdy foundation to start the year and that will likely keep the FOMC on the sidelines at the January meeting.

Source: 满地可银行

1. Public sector growth - https://www.nasdaq.com/articles/us-private-sector-job-growth-slows-more-expected-december
2. Top careers - https://www.msmunify.com/blogs/highest-paying-jobs-in-usa/
3. Skills - https://www.watermarkinsights.com/resources/blog/rise-trade-technical-careers/
4. Job openings - https://www.bnnbloomberg.ca/business/company-news/2025/01/07/us-job-openings-rise-to-six-month-high-on-business-services/
5. Fastest growing cities - https://cityoffoley.org/foley-among-fastest-growing-cities-in-u-s/
6. GDP - https://www.un.org/en/desa/global-growth-remain-subdued-amid-lingering-uncertainty
7. Workforce - https://thehill.com/policy/technology/5076325-companies-shrinking-workforce-artificial-intelligence-survey/
8. Productivity - https://www.morningstar.com/news/dow-jones/202501031827/the-american-worker-is-becoming-more-productive
9. DEI - https://www.philanthropyroundtable.org/trending-dei-retreat-in-2024/
10. Labor - https://www.cnn.com/2025/01/09/economy/us-jobs-report-december-preview/index.html

Paul is a former IBM Customer Success Manager who has deployed over 300 data and AI solutions across industries and geographies for the past 8 years.

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Paul is a Financial Planning, Analysis, and Reporting SME working with data including integration of macro and micro indicators as part of the integrated business planning and reporting cycle.

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Paul is a Public Policy Expert that has lecture on public finance as well as written numerous blogs on various areas of Public Policy.

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[email protected]

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