Key sectors driving job growth included healthcare (46,000), leisure and hospitality (43,000) and government (33,000)|Karen|CC BY-NC-ND 2.0
The US labor market wrapped up 2024 on a strong note, with December’s nonfarm payrolls climbing by 256,000, above the Dow Jones forecast of 155,000, reported the Bureau of Labor Statistics on Friday.
The data signal a strong employment market. In 2024, the US economy created 2.2 million jobs, more than the pre-pandemic levels but down from the 3 million gain in 2023.
Key sectors driving job growth included healthcare (46,000), leisure and hospitality (43,000) and government (33,000). Retail saw a notable rebound, adding 43,000 jobs after losing 29,000 in November.
What about the Fed rate cuts?
Economists opine that the strong jobs report and a dip in the unemployment rate to 4.1% means that Federal Reserve Chair Jerome Powell may hold interest rates steady. The central bank slashed borrowing rates thrice in 2024, with the latest one last month.
Powell has emphasized the need to slow rate cuts. Analysts forecast only one such cut this year.
Bond yields surged and may gain more momentum after a strong jobs report reinforced expectations. The 10-year US Treasury yield spiked nearly 10 basis points, representing its highest level since October 2023.
However, stocks fell yesterday, with Nasdaq 100 immediately dropping by ~1% as investors moved towards bonds with more lucrative returns.