The U.S. labor market ended 2024 with a bang, as employers added 256,000 jobs in December. This strong showing highlights the resilience of the job market despite economic uncertainties. The unemployment rate also fell to 4.1% from 4.2% in November.
This drop reflects fewer permanent job losers and a reduction in the duration of unemployment. It indicates that more people are finding stable employment. Average hourly earnings rose 0.3% in December, translating to a year-over-year increase of 3.9%.
This consistent wage growth is a positive sign for consumer spending and overall economic health. A variety of economic indicators point to a robust labor market. Charts tracking monthly changes in U.S. jobs over the past year, average hourly earnings over five years, and the U.S. unemployment rate over five years all reflect these positive trends.
The Federal Reserve’s pause in rate cuts during January reflects confidence in the labor market’s strength. Policymakers are likely to keep a close eye on these employment trends as they consider future monetary policies.
December job growth remains strong
“The December jobs report underscores the ongoing recovery and resilience of the U.S. labor market,” said Julia Pollak, chief economist at ZipRecruiter. “Despite economic headwinds, employers continue to hire at an impressive pace.”
The leisure and hospitality sector led the way in job gains, adding 67,000 positions in December. Healthcare and social assistance also saw strong growth with 55,000 new jobs.
Construction and manufacturing added 28,000 and 20,000 jobs respectively. However, the tech industry has been hit with widespread layoffs in recent months. Companies like Amazon, Meta, and Twitter have cut thousands of positions as they adjust to shifting economic conditions and slow revenue growth.
Overall, the U.S. economy added 4.5 million jobs in 2024, the second-best year for job growth on record after 2021. This caps off a remarkable recovery from the massive job losses seen in the early months of the pandemic. As the labor market continues to tighten, many employers report difficulties finding qualified workers to fill open positions.
This could put upward pressure on wages in the coming months. The next major data release will be the January jobs report on February 3, 2025. Economists will be watching closely to see if the labor market can maintain its momentum in the new year.
