The US job market continues to demonstrate resilience despite elevated interest rates, adding 256,000 jobs in December, significantly exceeding economists' expectations.
December Job Market Overview
The December report showed broad-based gains across multiple sectors. Healthcare led with 46,000 new positions, followed by retail trade with 43,000 jobs, and government employment with an increase of 33,000. The social assistance sector contributed another 23,000 positions.
Labor Market Trends in 2024
The labor market’s performance in 2024 shows a pattern of moderation while maintaining fundamental strength, with job gains averaging 186,000 per month. Although this is lower than the 2023 figures, it remains well above the level needed to keep up with population growth. This sustained job market resilience supports consumer spending and overall economic growth.
Impact on Monetary Policy
The stronger-than-expected employment figures are leading financial markets to reassess their expectations for early Federal Reserve rate cuts. With strong job creation and persistent wage growth, there is currently no indication for immediate monetary policy easing. Market participants adjust their rate-cut expectations in light of the economy's continued resilience.
The December jobs data supports the Federal Reserve's 'higher for longer' stance on interest rates, indicating resilience in the US economy.
