A report of significant interest released by the Labor Department on Friday revealed a larger-than-anticipated increase in U.S. employment for December. According to the report, non-farm payroll employment saw a significant jump, adding 256,000 jobs last month following a revised increase of 212,000 jobs in November.
Initially, economists had projected a rise of 160,000 jobs, which was set against a previously reported figure of 227,000 for the prior month. The unexpected growth in job numbers was bolstered by marked increases in the healthcare, social assistance, leisure, and hospitality sectors, alongside a recovery in the retail sector.
Additionally, the unemployment rate declined slightly to 4.1% in December from 4.2% in November, contrary to economists' expectations of it remaining stable. This decrease was attributed to the household survey's employment figures, which soared by 478,000, surpassing the labor force size increase of 243,000.
Kathy Bostjancic, Chief Economist at Nationwide, commented, "The robust December employment report is yet another indicator suggesting the Federal Reserve might hold off on changes, maintaining steady interest rates for the first half of the year." She further noted, "The labor market's strength, the recent pause in the downward trend of inflation, and possible upcoming amendments in tariff and immigration policies, which could drive inflation up, will lead the Fed to approach rate cuts with caution and patience."
The report also indicated a rise in average hourly earnings for employees, which increased by $0.10, or 0.3%, reaching $35.66 in December. However, the annual wage growth rate slowed slightly to 3.9% from November's 4.0%.
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