The U.S. added 256,000 jobs and the unemployment rate ticked down to 4.1 percent in December, according to data released Friday by the Labor Department.
The December jobs report showed the U.S. economy blowing past expectations to end the year. Economists projected the U.S. to gain 155,000 jobs and hold the jobless rate at 4.2 percent, according to consensus estimates.
The new jobs data caps off another year of sturdy job gains since the outbreak of the COVID-19 pandemic in 2020.
Under President Biden, the labor market powered through an inflation surge and high Federal Reserve interest rates meant to slow it down, posting record-breaking jobs gains. But the job market rebound — which had already begun during President-elect Trump’s first term — did little to sell inflation-weary voters on Biden’s economic agenda.
With Trump set to take office later this month, the Federal Reserve is now weighing the potential impact of his economic agenda on the bank’s efforts to keep inflation under control.
The Fed slashed interest rates three times to close out 2024 after price growth hit a plateau, but bank officials are on watch for an inflation surge caused by Trump’s proposed trade and immigration policies.
The December hiring surge may also force the Fed to slow down it rate cut plans, with the U.S. labor market still appearing to move in high gear.
Fed Governor Christopher Waller expressed confidence Wednesday that the bank would be able to move forward with planned rate cuts despite a slate of strong economic data and higher inflation.
“I believe that inflation will continue to make progress toward our 2 percent goal over the medium term and that further [interest rate] reductions will be appropriate,” he said in Paris at an event from the Organization for Economic Cooperation and Development (OECD).
But the December jobs report is the latest sign of an economy still cranking despite higher borrowing costs.
Updated at 8:50 a.m.
