• US non-farm payroll employment added 256,000 jobs in December
• Revisions to the two prior months were lower by 8,000 jobs

• Unemployment rate ticks down to 4.1%

• Average hourly earnings rose 0.3% MoM, 3.9% YoY

• Labor force participation rate held steady at 62.5%

• NFP to anchor Fed pause at its upcoming meeting later this month

• Fed Pause to Extend, Rate Cuts in 2025 Less Certain, Hike Risks Emerge?

The US economy closed out 2024 with another month of massive job growth. US labor market showcased its resilience in December, with non-farm payrolls surging by 256,000, significantly outpacing expectations of 165,000. This impressive figure also surpassed the average monthly gain of 186,000 for 2024. The change in total nonfarm payroll employment for October was revised up by 7,000, to 43,000, and the change for November was revised down by 15,000, to 212,000. With these revisions, employment in October and November combined is 8,000 lower than previously reported. For the year, job growth totalled 2.2 million, down from 2023’s 3.0 million, but a still solid year of hiring. That’s in line with annual totals from 2017 to 2019 but marks a slowdown from the blowout gains seen during the pandemic recovery during the prior years.

Private payrolls rose 223,000 – up from November’s 182,000 – with the largest gains seen in health care & social assistance (+69.5k), leisure & hospitality (+43k), and professional & business services (+28k). The public sector added 33k new positions last month.

The unemployment rate edged down to 4.1%, beating forecasts of remaining steady at 4.2%. Meanwhile, the labor force participation rate held steady at 62.5%, a level consistent with its range since late 2023. Wage growth showed a measured pace, with average hourly earnings rising by 0.3% MoM, in line with market expectations. On a yearly basis, wage growth softened slightly to 3.9% from 4.0% YoY previously.

Source: BIMB Securities Research - 13 Jan 2025