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The U.S. economy added jobs more rapidly than expected in December as Federal Reserve policymakers are keeping close tabs on the strength of the labor market ahead of their meeting later this month.
The Labor Department on Friday reported that employers added 256,000 jobs in December, well above the estimate from LSEG economists.
The unemployment rate came in at 4.1%, slightly lower than economists’ expectations.
The number of jobs added in the prior two months were both revised, with job creation in October revised up by 7,000 from a gain of 36,000 to 43,000; while November was revised down by 15,000 from a gain of 227,000 to 212,000. Taken together, those two months saw 8,000 fewer jobs created than previously reported.
Private sector payrolls added 223,000 jobs in December, much higher than the 135,000 estimated by LSEG economists.
The manufacturing sector saw employment fall by 13,000 in December, a surprise decline when economists projected a gain of 5,000 jobs.
Wage growth was largely in line with expectations, with average earnings up 0.3% on a monthly basis and 3.9% from a year ago.
Health care added 46,000 jobs in December with gains focused in home health care services (+15,000), nursing and residential care facilities (+14,000) and hospitals (+12,000). Health care added an average of 57,000 jobs per month in 2024, the same as the monthly average in 2023.
The retail sector added 43,000 in December after it lost 29,000 jobs in November. Last month’s gains were focused in clothing, shoe and jewelry retailers (+23,000), general merchandise (+13,000) and health and personal care (+7,000). Retail lost jobs in building materials and garden equipment (-11,000).
Government added 33,000 jobs in December, slightly lower than the monthly average for 2024 of 37,000 jobs per month. Last year saw slower growth in government jobs than in 2023, when the monthly average gain was 59,000 jobs.
Social assistance employment increased by 23,000 last month, most of which was in individual and family services (+17,000). The sector added an average of 18,000 jobs per month in 2024, slightly lower than the average of 23,000 in 2023.
This is a developing story. Please check back for updates.
