US unemployment falls further following strong holiday jobs report

U.S. job growth surged and unemployment dropped during the holiday season, highlighting the robustness of the economy, News.az reports citing The Independent.

However, not all news was rosy out of Friday’s Labor Department report, the unexpected show of strength may prove costly to homebuyers and businesses who were counting sharply lower interest rates that would lower the cost of buying everything from refrigerators to homes.

Job growth rose 212,000 last month from November, the Labor Department reported Friday.

The U.S. continued to create jobs steadily throughout 2024, 2.2 million in all, yet that growth has slowed as the explosion of hiring that followed the pandemic begins to normalize. The number of jobs created last year was down from the 3 million added in 2023, the 4.5 million in 2022, and the record 6.4 million jobs added in 2021 as the economy bounded back from massive pandemic layoffs.

By any measure, however, 256,000 new jobs in a month is impressive: In the five years before the pandemic, solid years for the economy, job growth averaged 190,000 a month.

And the jobs created in December were far greater than economist projections of 155,000 new jobs. Unemployment, which was expected to hover around 4.2%, fell to 4.1% last month. Healthcare companies added 46,000 jobs, retailers 43,000 and government agencies at the federal, state and local 33,000. But manufacturers cut 13,000 jobs.

U.S. markets tumbled immediately on the release of the December jobs number because the odds that the Federal Reserve will slow its plans to cut interest rates from here are growing. The economy doesn’t seem to need the help.

But rates are still painfully high for Americans trying to buy a house or finance a car or appliance. Mortgage rates just rose for the fourth consecutive week and remain at the highest level since July.

Average hourly wages rose 0.3% from November and 3.9% from a year earlier. The year-over-year wage gain was slightly less than economists had forecast.

News.Az