Washington (AFP) – US job gains soared past expectations in December, according to government data released Friday, in a sign the labor market remains healthy shortly before President-elect Donald Trump’s inauguration this month. This indicates he is set to inherit an economy in relatively good shape, despite running an election campaign in which he painted its condition as a disaster.
Hiring in the world’s biggest economy stood at 256,000 last month, up from a revised 212,000 in November, the Labor Department said. The December figure was significantly above the market consensus estimate of 154,000, according to Briefing.com. The jobless rate meanwhile crept down to 4.1 percent from 4.2 percent. The latest report marks a solid end to 2024 for the jobs market, which has held up in the face of elevated interest rates, allowing consumers to continue spending.
Outgoing President Joe Biden lauded his administration’s performance. “Although I inherited the worst economic crisis in decades with unemployment above six percent when I took office, we’ve had the lowest average unemployment rate of any administration in 50 years with unemployment at 4.1 percent as I leave,” he said in a statement. “This has been a hard-fought recovery,” he added. In a separate statement, Biden noted the country saw 21 million new business applications during his administration.
The United States “generated 2.2 million jobs in 2024, the slowest pace since 2020, but still above 1.99 million in 2019,” said KPMG chief economist Diane Swonk. Trump’s return to the White House this month could bring uncertainty. He has pledged to cut taxes, raise tariffs on imports, and deport undocumented immigrants — many of whom make up a significant part of the US labor force in sectors such as agriculture.
“This is a good report, but not a blockbuster one as it seems at first glance,” said Robert Frick, corporate economist at the Navy Federal Credit Union. “A big chunk of the headline number is from post-hurricane recovery, and the range of hiring remains narrow,” he noted. Yet, a surge in job growth could lead the US Federal Reserve to be slower in cutting interest rates this year, as officials work to bring down inflation sustainably. Such expectations sent Treasury yields higher early Friday.
“Strength in the labor market, recent stalling in the disinflationary trend in inflation, and the prospect of changes in tariff and immigration policies that could push inflation higher will keep the Fed cautious and patient,” said Nationwide chief economist Kathy Bostjancic. “We foresee them keeping rates steady throughout the first half of the year,” she added.
For now, average hourly earnings picked up 0.3 percent from the month before in December to $35.69. From a year ago, wages were up 3.9 percent. Among sectors, employment trended up in health care, government, and social assistance, the Labor Department said. Retail trade also added jobs in December after a loss in November.
“These data make at least a pause in cuts much more likely, which will push mortgage rates higher in the near term,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association. But Samuel Tombs, chief US economist at Pantheon Macroeconomics, believes that Fed officials are likely to conclude that monetary policy is still restrictive. “Labor market data are so volatile and confidence intervals so wide that trends are best determined from at least six months of data,” he said in a note.
© 2024 AFP
