Jobs Grow by More Than 250,000 in December; Industry Economists Weigh In

(Image courtesy of BLS; Breakout image courtesy of Kaboompics.com/pexels.com)

Total nonfarm payroll employment grew by 256,000 in December, and the unemployment rate was little changed at 4.1%, the U.S. Bureau of Labor Statistics reported.

Employment gains were made in health care, government and social assistance. Retail also added jobs in December, after losses in November.

The change in total nonfarm payroll employment for October was revised up by 7,000, from 36,000 to 43,000, and the change for November was revised down by 15,000, from 227,000 to 212,000.

“In recent months, there had been increases in the share of workers who were unemployed for longer spells. Although other data continue to report that hiring rates remain quite low, in December, the number of long-term unemployed individuals decreased,” MBA SVP and Chief Economist Mike Fratantoni said.

“The December employment report is a picture of a strong job market. While the FOMC had indicated that they could slow the pace of rate cuts as we enter 2025, these data make at least a pause in cuts much more likely, which will push mortgage rates higher in the near term,” Fratantoni continued.

“The December jobs report blew by expectations, capping a year of resilient, albeit slower, job growth. Today’s strong report empowers the Fed to take a more hawkish stance, providing cover for the expected pause in rate cuts at January’s FOMC meeting,” said First American Senior Economist Sam Williamson.

“The January pause and a more gradual pace of rate cuts will allow the Fed to assess the impact of the 100-basis-point cuts made in late 2024 and gain clarity on the incoming administration’s fiscal policies and 119th Congress’ legislative priorities,” Williamson posited. “Overall, mortgage rates are expected to drift modestly lower to the mid-to-low 6% range by year-end, though unexpected labor market or economic downturns could push rates lower.”