US employers added a whopping 216,000 jobs in December, a surprisingly strong increase that can likely sow doubts as to when the Federal Reserve will begin cutting rates this yr.
Last month’s supayroll growth got here in over November’s higher-than-expected 199,000 advance — and well ahead of the 170,000 economists expected, based on Refinitiv data.
The figure marks a mean monthly payroll gain of 232,000 over the previous 12 months — a powerful figure considering the economy was gripped with stubbornly-high inflation and the very best borrowing rate Americans have seen in 22 years.
The Labor Department’s data revised November’s payroll gains down by 26,000, while October’s figure was revised down by 45,000.
The gains got here as a surprise to economists, who were hoping for a softening labor market, which might make Federal Reserve officials more prone to implement rate of interest cuts.
The Fed has lifted the benchmark federal funds rate to a 22-year high, between 5.25% and 5.5%, in hopes to tamp down inflation to its highly-coveted 2% goal.
In 2023, US employers added a mean of 232,000 jobs every month because the labor market caps off a surprisingly-resilient yr. AP
Data released by the Bureau of Labor of Labor Statistics on Friday also noted that the unemployment rate stayed the identical, at 3.7%, a tick lower than the three.8% rate Refinitiv economists also predicted.
Average hourly earnings — a key measure of inflation — increased 15 cents, or 0.4% for the month, to $34.27. Over the past 12 months, hourly earnings are up 4.1%.
The advance comes just after Recent York’s minimum-wage pay bump took effect, lifting the minimum wage in Recent York City, Long Island and Westchester County $1, from $15 to $16.
In the rest of Recent York State — which is one in all 22 states getting minimum wage hikes in the brand new yr — the brand new minimum wage is $15, up from $14.20.
A separate report released by the Labor Department on Tuesday showed that job openings unexpectedly slowed to eight.7 million at the top of November, the bottom level since March 2021.
In accordance with Indeed, as of Dec. 29, 2023, open positions on the positioning declined greater than 15% from a yr earlier. The info supports figures from the Labor Department that showed job openings unexpectedly slowed at the top of November, to eight.7 million. Universal Images Group via Getty Images
The figure marks a decrease from the downward revised 9.3 million openings reported the previous month, a signal of shaky confidence within the job market.
Though the dip got here out of the blue for economists, it backs up data recently released by American employment website Indeed, which found that as of Dec. 29, 2023, open positions on the positioning declined greater than 15% from a yr earlier.
Following the discharge of the newest Consumer Price Index in November — which tracks changes in the prices of on a regular basis goods and services and showed that US inflation rose 3.1% — Fed chair Jerome Powell said the historic tightening of monetary policy is probably going over.
Federal Reserve officials have suggested that the US economy is in for as many as three rate of interest cuts in 2024. Fed chair Jerome Powell said last month that the historic tightening of monetary policy is probably going over. Xinhua/Shutterstock
Powell dovetailed the report with projections from all 19 policymakers that showed near unanimity that borrowing costs would fall in 2024 — as many as 3 times.
While Fed policymakers didn’t need to take one other rate hike off the table, it is not any longer the central bank’s “base case,” he said in remarks made in a press conference following the top of the central bank’s final policy meeting of 2023.
December’s CPI report is ready to be released on Jan. 11.
Central bankers will settle on whether or not to maintain rates of interest regular, between 5.25% and 5.5%, following their next two-day meeting, which can conclude on Jan. 31.
