Jobs Report, December 2024:

Job growth was much stronger than expected in December, possibly giving the Federal Reserve less incentive to cut interest rates this year.

Nonfarm payrolls rose 256,000 in the month from 212,000 in November and topped the Dow Jones consensus forecast of 155,000. Bureau of Labor Statistics reported on Friday.

The unemployment rate fell to 4.1%, one-tenth below expectations.

Stock futures were negative after the report, while Treasury yields rose sharply.

The report capped a year in which employment rose every month, albeit inconsistently and at times raising questions about whether a recession is looming. However, the past two months have shown that the labor market is still running strong as the Fed considers the next steps in monetary policy.

One area that Fed officials emphasized was not a source of inflation was the labor market, and wages rose slightly less than expected. Average hourly earnings rose 0.3% for the month, in line with forecasts, but the 12-month gain of 3.9% was slightly below forecasts and suggests that wage inflation is at least becoming less of a factor.

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