The U.S. job market ended 2024 on a high note, with employers adding a robust 256,000 jobs in December. This exceeded economists’ expectations and brought the unemployment rate down to 4.1 percent. The strong job growth was seen across several sectors.
Healthcare added 46,000 jobs, retail rebounded with 43,000 new positions, and government agencies hired 33,000 workers. However, manufacturers cut 13,000 jobs. Average hourly wages rose 0.3 percent from November and 3.9 percent from a year earlier.
This was slightly less than economists had forecast. Despite the positive jobs report, the stock market struggled on Friday. The Dow Jones Industrial Average plunged 640 points, or 1.5 percent.
December job growth exceeds expectations
The S&P 500 dropped 1.3 percent, and the Nasdaq Composite fell 1.4 percent. Investors are concerned that the strong economic data will make the Federal Reserve less likely to cut interest rates.
“It seems pretty certain that the pace of Fed rate cuts is now going to slow down,” said Brian Coulton, chief economist at Fitch Ratings. The U.S. economy has shown surprising resilience in recent years. Despite the Fed raising interest rates 11 times in 2022 and 2023, companies kept hiring, consumers kept spending, and the economy continued to grow.
Inflation has also come down from its peak of 9.1 percent in June 2022 to 2.7 percent in November. However, progress against inflation has stalled in recent months, remaining above the Fed’s 2 percent target. President Biden touted the strong job numbers, saying, “Although forecasts were projecting it would take years to achieve a full recovery, we have had the strongest growth and employment creation of any advanced country, brought inflation back down, and achieved the soft landing that few thought was possible.”
As the U.S. enters 2025, the December job growth provides a hopeful signal of a potential upswing.
However, challenges persist in the labor market and broader economic uncertainties remain.
