US job growth picked up in December and wage gains exceeded expectations, diminishing prospects for a Federal Reserve interest-rate cut in March.
Nonfarm payrolls increased 216,000 after a downwardly revised 173,000 advance in November, a Bureau of Labor Statistics report showed Friday. The unemployment rate held at 3.7% as the workforce shrank. Average hourly earnings rose 0.4% from a month earlier.
Metric |
Actual |
Median estimate |
Change in payrolls (MoM) |
+216k |
+175k |
Unemployment rate |
3.7% |
3.8% |
Average hourly earnings (MoM) |
+0.4% |
+0.3% |
The advance in payrolls was led by health care, government, construction and leisure and hospitality. A measure of the breadth of job gains picked up.
The December figures wrap up another solid year for a labor market that has served as the main engine for resilient consumer spending. The healthy economic growth that followed surprised many economists in 2023, prompting many to rethink their recession calls.
Traders reduced bets on a Fed rate cut in March to about 50-50 odds, while Treasury yields rose and US stock futures fell.
The participation rate — the share of the population that is working or looking for work — fell by 0.3 percentage point to 62.5%. The decrease was concentrated among younger and older cohorts. For those ages 25-54, participation eased 0.1 point.
Sustained job growth and a further cooling of inflation will bolster prospects that Federal Reserve policymakers can achieve a soft landing for the economy.
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Read more articles by Augusta Saraiva