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Jobs report December 2024:

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Job growth was much stronger than expected in December, possibly providing the Federal Reserve less incentive to cut interest rates this year.

Nonfarm payrolls surged by 256,000 for the month, up from 212,000 in November and above the 155,000 forecast from the Dow Jones consensus, the Bureau of Labor Statistics reported Friday.

The unemployment rate edged down to 4.1%, one-tenth of a point below expectations. An alternative measure that includes discouraged workers and those holding part-time positions for economic reasons moved down to 7.5%, a decrease of 0.2 percentage point and the lowest since June 2024.

Stock market futures were negative after the report’s release while Treasury yields soared.

The report brings to a close a year in which employment grew each month, though inconsistently and at times raising questions over whether a recession loomed. However, the final two months showed a labor market still operating at strength as the Fed contemplates its next moves on monetary policy.

One area that Fed officials have stressed to not be a source of inflation is the labor market, and wages grew slightly less than expected.

Average hourly earnings increased 0.3% on the month, which was in line with forecasts, but the 12-month gain of 3.9% was slightly below the outlook and indicative that wage inflation at least is becoming less of a factor. The average work week again held steady at 34.3 hours.

Job growth came from the familiar sources of health care (up 46,000), leisure and hospitality (43,000) and government (33,000).

Retail also saw a sizeable gain, up 43,000 after losing 29,000 in November heading into the holiday shopping season. The sector saw payroll growth of 2.2 million for the full year, down nearly one-third from the 3 million gain in 2023.

Revisions for prior months were less substantial than has been the recent trend. The October count saw an upward change of 7,000 to 43,000, while the November number was cut by 15,000 from the prior estimate.

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Economics

The unemployment rate for Black women fell in December

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A jobseeker holds flyers during the New York Public Library’s annual Bronx Job Fair & Expo at the the Bronx Library Center in the Bronx borough of New York, US, on Friday, Sept. 6, 2024.

Yuki Iwamura | Bloomberg | Getty Images

The unemployment rate fell for Black women in December, following an alarming increase in the figure for November.

Overall, nonfarm payrolls grew much more than expected in December, rising 256,000 in the month and topping economists’ prediction for a gain of 155,000, per Dow Jones. The unemployment rate ticked down to 4.1% in a sign of a resilient labor market. The data fueled the belief that the Federal Reserve may cut interest rates much less than anticipated this year.

For Black women, the unemployment rate dropped to 5.4% in December. That’s down from 5.9% in November, when the jobless rate rose nearly a percentage point for the cohort. The labor force participation rate, which tracks the population employed or seeking work, inched up to 62.4%.

Among Black workers overall, the unemployment rate also declined in December, slipping to 6.1%. That compares to a rate of 6.4% in November and 5.7% in October.

“There were some concerns about the Black unemployment rate going up,” said Elise Gould, senior economist at the Economic Policy Institute, referring to November’s uptick. “It’s still significantly higher than for other groups – and that’s still a concern – but nothing in this report jumps out as particularly problematic.”

Black men also made strides, with the jobless rate declining to 5.6% in December from 6% a month earlier. The labor force participation rate for the cohort inched lower to 68.2% last month from 68.7%.

Hispanic men also saw their unemployment rate improve in December, ticking down to 4% from 4.4% as labor force participation improved.

Though the unemployment rate among Hispanic women inched up to 5.3% last month from 5.2%, Gould noted that this shift is within the margin of error. “There’s a lot of volatility with the data,” she said. “I would say that things mostly held steady.”

By comparison, the jobless rate fell to 3.6% in December among white workers overall. That’s down from 3.8%. Among white men, the unemployment rate slipped to 3.3% last month from 3.5%, but the figure held steady at 3.4% for white women.

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Economics

Here’s where the jobs are for December 2024 – in one chart

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December’s job report marked yet another month of stronger-than-expected growth, with gains coming from many different parts of the U.S. economy.

Last month, health care and social assistance jobs saw the largest gains for a third consecutive month, adding 69,500 to payrolls, according to data from the Bureau of Labor Statistics. Including private education, as some economists do, the health care group’s growth would have risen by 80,000.

Retail trade, which added 43,400 jobs, and leisure and hospitality, up 43,000, scored the second- and third-largest increases last month. Retail trade jobs are in or outside a store, from infomercials to street vendors to vending machines, can sell to consumers or other businesses and involve after-sale services, such as repair and installation, the BLS says.

Government jobs rounded out the top four, posting growth of 33,000 in December.

“Recently, job growth has been very narrowly concentrated in government and health care,” Julia Pollak, ZipRecruiter’s chief economist, told CNBC. “Now, it seems like perhaps it’s broadening out.”

Retail growth, a sharp turnaround from steep losses in November, was bolstered by employment increases across key categories. Notably, clothing, clothing accessories, shoe and jewelry retailers saw an increase of 23,000 positions, while general merchandise retailers and health and personal care retailers grew by 13,000 and 7,000 jobs, respectively, according to BLS data.

That rise is “not just a blip,” Pollak said, adding that it reflects other data that shows an improving backdrop in the sector.

For instance, the Federal Reserve Bank of Dallas’ December Texas Retail Outlook Survey showed an acceleration in retail sales activity. The sales index, which measures state retail activity, hit its highest level since late 2021.

“Retailers are more upbeat on 2025 and on the backs of a strong consumer,” Pollak continued. “We’ll probably see more movement in the housing market coming soon.”

In contrast to the strength in retail trade, manufacturing – which saw sizable growth in November – led the declines for December, losing 13,000 jobs.

Additionally, mining and logging, and wholesale trade reversed course last month from November. After seeing slight increases two months ago, mining and logging employment dropped by 3,000, while wholesale trade slumped even more, losing 3,500 positions.

Professional and business services, plus financial activities continued to be bright spots. Those two groups were among the nine in 13 sectors that added jobs last month.

“We’re seeing improvement in total vehicle sales, Americans are making big ticket purchases again, [and] businesses are buying vehicles too,” Pollak said. “These trends have been picking up over the last few months; they were taking a while to filter into the labor market, but this report suggests … perhaps a recovery is starting to take hold.”

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Economics

Friday’s jobs report may give mixed view of labor market. What to expect

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The December jobs report is likely to provide only limited clarity on where the labor market is headed, with experts differing on how pronounced a slowdown there is in hiring.

From a consensus view, economists expect the Bureau of Labor Statistics on Friday morning to report a gain of 155,000 in nonfarm payrolls, a step down from the surprising 227,000 increase in November but about in keeping with the four-month average. The unemployment rate is forecast to hold steady at 4.2%.

However, the details of the report will be key, with some on Wall Street expecting that the number could come in a bit weaker, depending on how seasonal trends and other factors play out.

“We’ve seen a little bit of the softening and I think we’ll continue to see that, but it’s still a good [labor] market overall,” said Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network, a Chicago-based staffing firm. “Things are leveling off a little bit. People are still a tad cautious, trying to figure out this new year and the new economic climate and political climate,” she said.

On average, the economy in 2024 added about 180,000 jobs a month through November, though the data has been volatile and somewhat confusing lately. Federal Reserve Governor Michelle Bowman complained Thursday that labor market reports “have become increasingly difficult to interpret” due to measurement challenges, which have included a surge of new workers and low response rates on surveys.

The December report also could be harder to judge depending on how the hiring of holiday workers affects the numbers.

Goldman Sachs, for one, estimates that payroll growth will come in at just 125,000, with the unemployment rate drifting up to 4.3%.

“Our forecast reflects a rebound in the labor force participation rate and middling household employment growth amid more challenging job-finding prospects,” the Wall Street bank said in a note. “We expect deceleration in job growth in non-retail sectors, particularly professional services and construction, to more than offset stronger retail hiring this month.”

Similarly, Citigroup is predicting just 120,000 new jobs and a 4.4% unemployment rate, which economist Andrew Hollenhorst wrote “should remind markets that the labor market has not stabilized and is continuing to soften. Risks are balanced to an even softer reading.”

However, Hoersten said she thinks that once some of the current volatile factors subside, companies will continue adding headcount, even if at a gradual rate. A BLS report earlier this week put job openings in November at a six-month high of just over 8 million, while layoffs were little changed and the quits rate, a measure of worker mobility, declined.

At the December meeting of the Federal Reserve, officials noted an “ongoing gradual easing in labor market” conditions, but saw “no signs of rapid deterioration,” according to minutes released Wednesday.

In a recent business survey, LaSalle Network found that 67% of small- and mid-size companies plan to increase headcount in 2025, down from 74% the year before. The survey also found that salary increases are expected to be smaller and hybrid working is likely to remain prevalent as a wedge to compete against larger companies for workers.

Average hourly earnings are expected to show a 0.3% increase in December and an annual rate of 4% from a year ago, little changed from November.

“Right now, I think things are just going to stay fairly flat overall, nothing drastic one way or the other,” Hoersten said. “But I do believe it’s still a good, strong market, and companies just needed to get past the little bit of a crazy climate over the past couple months and get back to the steady state.”

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