U.S. Job Market Adds 256,000 Jobs in December
The U.S. economy showed surprising strength in December, adding 256,000 jobs. This was more than experts expected and highlights how strong the job market is, even with higher borrowing costs. The unemployment rate fell to 4.1%, showing continued stability.
This job growth was an increase from the 212,000 jobs added in November, according to the Labor Department. In October, job numbers were impacted by hurricanes and a major strike at Boeing, but December’s data provides a clearer picture of how the economy is doing.
Economy Stays Strong Despite Challenges
Higher interest rates, set by the Federal Reserve to control inflation, were expected to slow down the economy or cause a recession. Instead, the economy has stayed strong. People kept spending money, businesses kept hiring, and the U.S. economy grew at a solid rate. Layoffs are also lower than they were before the pandemic, with unemployment claims dropping to the lowest level in nearly a year.
Inflation, which was very high at 9.1% in June 2022, has fallen to 2.7% as of November 2024. Because of this, the Federal Reserve cut interest rates three times at the end of 2024. However, they plan to be more careful in 2025 and expect to reduce rates only twice as inflation is still above their 2% goal.
Wages Growing at a Steady Pace
Wages are also growing steadily. In December, average hourly wages went up 0.3% from November and 4% compared to the same time last year. Nancy Vanden Houten, an economist at Oxford Economics, explained that this level of wage growth is good for keeping inflation under control. She said higher productivity allows companies to pay workers more without raising prices too much.
A Look Back at the Job Market in 2024
In total, about 2.1 million jobs were added in 2024. While this is less than the 3 million jobs added in 2023 or the record 7.2 million jobs in 2021, it still shows the job market is strong. Boston College economist Brian Bethune said the pace of hiring in December was balanced—not too fast to cause inflation but not too slow to hurt the economy.
Even with challenges like inflation and interest rate changes, the U.S. job market continues to be a key part of the country’s economic strength.