December Jobs Boom: 256K Added as Unemployment Holds at 4.1%, Wage Growth Steady

U.S. December Jobs Report: Payroll Growth Exceeds Expectations as Unemployment Holds Steady

Total nonfarm payroll employment surged by 256,000 in December, exceeding market expectations, while the unemployment rate held steady at 4.1%, according to the U.S. Bureau of Labor Statistics. Notable gains were observed in health care, government, and social assistance, with retail trade rebounding after losses in November.

Health Care and Government Lead Job Gains

Health care added 46,000 jobs in December, driven by robust growth in home health care services (+15,000), nursing and residential care facilities (+14,000), and hospitals (+12,000). The sector maintained its momentum, averaging 57,000 new jobs per month throughout 2024, consistent with 2023 levels.

Government employment continued its upward trend, adding 33,000 jobs in December, bolstered by state government hiring (+10,000). However, the sector’s monthly average growth of 37,000 jobs in 2024 trailed the 59,000 average recorded in 2023.

Retail Trade Rebounds After November Decline

Retail trade employment rose by 43,000 in December, recovering from a 29,000-job loss in November. Gains were concentrated in clothing, accessory, and shoe retailers (+23,000), general merchandise retailers (+13,000), and health and personal care stores (+7,000). Despite this boost, retail employment remained flat for the year, reflecting slower consumer activity compared to prior periods.

Wages and Workweek Remain Steady

Average hourly earnings for private nonfarm payroll employees increased by 0.3% in December, reaching $35.69. This brought the annual wage growth to 3.9%, indicating moderate but consistent upward pressure on wages. Meanwhile, the average workweek held steady at 34.3 hours for the fifth consecutive month, signaling stable labor demand.

Broader Labor Market Trends Hold Firm

Unemployment remained unchanged at 4.1%, with 6.9 million Americans unemployed. Notable improvements were observed among White workers, whose jobless rate edged down to 3.6%. Long-term unemployment stayed at 1.6 million, accounting for 22.4% of the unemployed, highlighting ongoing challenges for this group.

The labor force participation rate and employment-population ratio, at 62.5% and 60.0%, respectively, showed no significant movement. The number of individuals working part-time for economic reasons also remained unchanged at 4.4 million.

Market Outlook: Moderate Growth with Persistent Challenges

The stronger-than-expected payroll increase suggests continued resilience in the U.S. labor market. However, slower gains in sectors like leisure and hospitality, and unchanged long-term unemployment figures, signal lingering structural challenges. While wage growth and steady employment gains support a bullish short-term view, ongoing stability in unemployment and participation rates may limit substantial market momentum.